The Information Technology Landscape in Egypt


 Analysis: Strengths and Weaknesses


 
 
About Egypt 
    In combining all of the salient features of each of the above facets of the IT industry in Egypt, a multi-dimensional view of Egypt’s comparative advantages as an international provider of IT products and services begins to emerge. 

   The traditional Strength, Weaknesses, Opportunities and Threats (SWOT) analysis is presented here in tabular form:
 
STRENGTHS WEAKNESSES OPPORTUNITIES THREATS
The Egyptian population is young and highly educated Lack of education and support systems to support the development of competitive IT companies Comparative Advantages in the International Marketplace Lack of value ascribed to software (for local market development)
Already recognized as the IT and software center for the Gulf region Lack of growth in the domestic marketplace Internet access is provided by only about 50 companies currently and the subscriber base only numbers aobut 80,000 Piracy rates
Labor costs are lower than for many other software developing countries Price and availability of Internet technology and services IT penetration in government ministries is relatively low, in general, with several specific exceptions such as Defense Government regulations and support for the industry
Technical skills and demographics Limited access to senior staff needed for development of industry Market penetration of PCs in the home and business is still very low (70,000 to 100,000
PCs estimated)
Financial  support for the industry
Current Telecom Egypt pricing structure Incubators for Egyptian firms overseas Limited distribution skills in international software marketplace

     The table succinctly summarizes Egypt’s advantages and disadvantages as a possible  IT competitor in the global economy.  As has always been the case with Egyptian economic development, the country has always brought both to the table in significant measure.  Assuming a competitive vacuum in which Egypt did not have to compete with such formidable IT providers such as India, Ireland and Israel, there is much to be done before achieving a sustainable IT competitive advantage.  Much of this is due to  Egypt’s steadfast defense of the centrally-planned import substitution model after much of the world had abandoned the model.  During the same timeframe the above mentioned countries were laying the groundwork for present enviable positioning.  In contrast, Egypt must not only attempt to nurture a formative IT industry, but continue an economic restructuring on a massive scale.  The result is clear, while the GOE’s initiatives in the sector are commendable, the overall effort is hampered by an economy in the midst of transition. This accounts for Egypt Telecom promoting the Internet in collaboration with the IDSC and RITSEC, while simultaneously hampering the effort with excessive connectivity charges.  A government engaged in an impressive array of IT initiatives, whose public sector, still the backbone of Egypt’s economy, remains unenthusiastic about participation.  This is particularly true of the banking and financial sectors that are a traditional driving force in the IT sector.  Without an overall linkage between the disparate parts of the Egyptian economy, achieving an IT industry that is competitive on an international scale seems unlikely in the near future.

     Regionally competitive, however is a very different matter.  Egypt has already established itself as the premier IT provider of the Arab world.  This expanded market counterbalances the lack of aggressive growth domestically, generates external revenues and gives the local industry an international dimension early in its existence.   It will be Egypt’s ability to leverage its geo-political positioning, its place at the center of Arab media and culture, its dynamic new stock exchange and its current IT capabilities that will determine if it can establish itself as the dominant Arab economy in the export of goods and services on a regional level.  Achieving the foundations for a regional competitive advantage may well put Egypt on the way to being competitive on the international stage.  If Egypt can not leverage these advantages, it will face challenges to its current regional status.  Egypt is at a watershed in its ability to compete in the new world economy; it is now in the midst of its window of opportunity and the outcome of its current efforts have yet to be decided.
 

Telecommunication
Infrastructure
Privatization and Deregulation
Internet Activity
Internet History
Hardware manufacturing
E-Commerce 
Software development
IT Usage
(bymilitary, households and Labor)
IT Geographics
IT Financing
IT Labor Market
Government Policies
Legal Environment
Analysis : IT Strengths/ and Weaknesses
Analysis :Impacts on the Business
Sources and Links
About the authors

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Last update: December 13, 1999