by Beth Bacheldor

Egypt Continues IT Outsourcing Push

Oct 07, 2010
Enterprise Applications

The Middle Eastern country renews its efforts to build up its IT outsourcing industry.

As many of you know, India isn’t the only foreign game in town when it comes to building and growing an IT outsourcing industry. I’ve written about China, Vietnam and Egypt (you can read about those here and here). I’ve even written about Latin America in this blog (and expect to more on that in a few days, when I share with you some of the highlights of the conversation I had with TCS about its expansion into Latin America).

Anyway, Egypt continues to push for its share of the IT outsourcing market. According to this article from the Associated Press, the country is aiming for a tenfold increase in exports from its growing outsourcing industry by 2020. To get there, Egypt is focusing on boosting its IT entrepreneurship and co-ownership of intellectual property, according to the country’s IT  minister Tarkek Kamel, who reportedly spoke at an investment conference in Cairo. Kamel said the IT outsourcing sector has brought in almost $1.1 billion in exports this year, and officials are estimating an increase to $10 billion by the end of the decade.

Apparently, outsourcing, call centers and other support services were creating about 40,000 jobs per year. But Egypt wants to go beyond the call center into higher-value IT services. Kamel pointed to Egypt’s new Center for Innovation and Entrepreneurship. The new center is designed to stimulate plans for developing IT in Egypt carried out by Ministry of Communication and Information Technology (MCIT) in cooperation with other ministries and agencies.

Kamel also mentioned a pilot project with IBM on nanotechnology. Indeed, IBM has been working with the Egyptian government on a nanotechnology research center in Cairo. At the center, Egyptian scientists and engineers are working with IBM scientists and engineers on advanced nanoscience and nanotechnology programs. (By the way, back in 2008 IBM opened a service delivery center in Egypt, which provides business consulting, cross-industry expertise, application development and maintenance, software testing and embedded software development services).

To grow its IT outsourcing industry will require foreign investment in Egypt’s burgeoning economy. The populous country’s goals are big: it hopes to attract direct foreign investments of between $12-15 billion per year. Egypt acknowledges it need to build up its economy in order to meet the needs of its 80 million citizens and demands for more jobs.

The push for new revenue comes as Egyptian officials project economic growth could reach at least 6 percent this year, and inch up slightly higher in the coming year, according to the AP article.