ICT Minister Witnesses Launch of Digital Egypt Strategy for Offshoring Industry

16 February 2022

Egypt’s Information Technology Industry Development Agency launched Digital Egypt Strategy for Offshoring (2022-2026) unlocking growth potential in the industry. A diverse strategy aims to triple export revenue from digitally-enabled offshoring services. The new strategy ensures creating +215K jobs and increasing Egypt’s competitiveness in R&D and high-value services.

Minister of CIT Amr Talaat witnessed, via videoconference, the launch event, attended by +120 multinational and local companies as well as CEOs and senior executives of offshoring service providers.

In his opening remarks, the Minister stated: Egypt has many competitive advantages that augment its attractiveness as a global offshoring destination, given the country’s unique location and large talent pool.

Talaat assured that over the past few months, MCIT worked together with experts to study Egypt's opportunities in the global offshoring market; as a result, the strategy was developed. He added that he looks forward to cooperating with local and international companies to further grow the domestic offshoring industry.

Moreover, Talaat pointed out efforts made by MCIT for 4 years to achieve digital transformation in all state’s sectors, and projects it implements to develop the telecom infrastructure. He highlighted MCIT’s heavy investment in people through training programs that meet home and global market needs. “The Ministry multiplied its training budget 22 times, helping achieve a 50-fold increase in the number of trainees. It also targets training 200K people this year, at a 1.1 billion cost,” Talaat said.

Talaat underlined that MCIT coordinates with the private sector and prestigious academic institutions to provide young people with technical training opportunities to help them gain hands-on experience and create a talent pool capable of building the knowledge economy.

ICT is the highest-growing state sector, Talaat noted. It grows at a 16% rate and contributes to the GDP by 5%, with a target of reaching 8% within three years. On Kearney’s Global Services Location Index (GSLI) 2021, Egypt occupied the top spot in the Middle East and Africa and the 15th globally. In addition, the volume of investments channeled into tech startups rose by 170%, the ICT Minister added.

ITIDA developed the new strategy, in concert with "Ernst & Young", a global consulting firm. It is based on a thorough and objective study of the Egyptian market, while simultaneously measuring and monitoring the growing demand in the global market for offshoring services, which is projected to amount to USD 540bn, with an annual growth rate ranging between 8% to 9% until 2026.

Digital Egypt strategy for offshoring industry consists of three main pillars: development of talent capabilities; development of industry ecosystem; and promotion of Egypt in international markets.

Jointly, these pillars include 9 main initiatives to achieve desired goals. The most sought-after goals are to make inroads into local exports of offshoring services, with an annual growth of 19%, and to create nearly 215K jobs in the strategy’s conduct phase (2022-2026).

Amr Mahfouz, CEO of ITIDA, commented: “We’re committed to developing a strong, collaborative business environment to drive the next phase of growth in Egypt’s offshoring sector.” Mahfouz presented the strategy pillars, led and reviewed by ITIDA with key industry players and partners to further enhance trust, credibility and increase adoption. Mahfouz added that the strategy carefully monitored the industry’s cost structure and compared it with other contenders. This contributed to development of a gamut of industry-focused programs, attractive incentives [subsidies, rebates, and reimbursements], market entry endeavors and global positioning, in addition to aftercare support to lure more global players and investments.

Mahfouz noted that ITIDA offers incentives and assistance designed carefully from an investor's perspective and provided through the entire business lifecycle. “We primarily target to improve the overall cost competitiveness of Egypt's offshoring industry, attract more foreign direct investment and encourage the expansion of existing industry players and investors,” Mahfouz added.

Additionally, the strategy aims to leverage the country’s value proposition with its large talent pool of +600K annual graduates, as Egypt is strongly pivoted to serve EMEA region due to the availability and abundance of multilingual skills, time zone, and cultural affinity.

Meanwhile, ITIDA also focuses on developing training programs to build talents in key technologies of high-value services, gaining traction in Egypt, e.g. Artificial Intelligence, robotic process automation, Big Data analytics, mobility, Cloud Computing, embedded software, and electronic chip design.

The newly-started strategy has detailed programs and initiatives developed to tap into the youth across the country and to upskill them at a professional level, according to the needs of each geographical region and high-demand languages and markets.

Recent structural reforms kick started Egypt’s economic and social growth engine. The country has already made great strides in its DX journey where ICT has become a salient feature and one of development key building blocks.

This fueled the local ICT sector's growth and enabled it to demonstrate resilience through Covid-19 pandemic. It augmented Egypt’s global appeal for investors and encouraged more demand from global enterprises choosing Egypt as a reliable offshoring destination and business services hub. Building on this momentum, the Ministry of Communications and Information Technology has launched “Digital Egypt Strategy for the Offshoring Industry 2022-2026” to propel the sector on a higher growth trajectory.

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