We use cookies for analytics, advertising and to improve our site. You agree to our use of cookies by closing this message box or continuing to use our site. To find out more, including how to change your settings, see our Cookie Policy

Egypt's ITIDA launches new Digital Egypt strategy for Offshoring

The Five-year Strategy Unlocks New Growth Potential in Egypt’s Well-established Global IT Service Delivery and Targets Adding 215k New Jobs

Wed, Feb. 16, 2022

ITIDA Information Technology Industry Development Agency

Egypt’s Information Technology Industry Development Agency (ITIDA) has launched a new Digital Egypt strategy for Offshoring (2022-2026) unlocking growth potentials in the industry.
The diverse strategy aims to triple the export revenue from digitally-enabled offshoring services, in addition to creating more than 215k jobs and increasing Egypt’s competitiveness in areas of R&D and high-value services. 
The Minister of Communications and Information Technology Amr Talaat has witnessed, via videoconference, the launch of Digital Egypt Strategy. The launch event was attended by more than 120 multinational and local companies and CEOs and senior executives of offshoring service providers.
During his opening remarks, Minister of Communications and Information Technology, Amr Talaat stated: Egypt has many competitive advantages that increase its likelihood of becoming a global offshoring leader, given the country’s remarkable location and skillful young population.
Talaat stated that over the past few months, MCIT has worked hand in hand 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 local offshoring industry.
Moreover, Talaat pointed out the efforts that MCIT made over the past four years to achieve digital transformation in all the state sectors, and the projects it implements to develop the telecommunications infrastructure. He said that MCIT invests in people through a broad range of training programs that meet market needs. The Ministry has 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.
The ICT Minister underlined that MCIT coordinates with private companies 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.
The new strategy is developed by ITIDA, in cooperation with the global consulting firm "Ernst & Young". 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 USD540 bn, with an annual growth rate ranging between 8% to 9% until 2026.
The Digital Egypt strategy for the offshoring industry consists of three main pillars: the development of talent capabilities; the development of the industry ecosystem; and international marketing and promotion for Egypt.
Collectively, these three pillars include 9 main initiatives to achieve the desired goals, the most important of which is to achieve a boom in Egyptian exports of offshoring services, with an annual growth of 19%, and the creation of approximately 215k jobs during the implementation period of the strategy (2022-2026).
Amr Mahfouz, CEO of ITIDA, said: “We’re committed to developing a strong, collaborative business environment to drive the next phase of growth in Egypt’s offshoring Sector,”. Mahfouz has presented the pillars of the strategy which ITIDA has led and reviewed with key industry players and partners to further enhance trust, credibility and increase adoption. Mahfouz added that the strategy carefully monitored the cost structure of the industry and compared it with other competing countries, which contributed to the development of a gamut of industry-focused programs, attractive incentives (subsidies, rebates, reimbursements), marketing and global positioning, and aftercare support that would lure more global players and investments.
Mahfouz noted that to achieve these objectives ITIDA offers incentives and assistance designed carefully from an investor's perspective and provided during the entire business lifecycle. “We primarily target to improve the overall cost competitiveness of Egypt's offshoring industry, and to attract more foreign direct investment and encourage the expansion of existing industry players and investors.”, Mahfouz added.
Additionally, the strategy aims to leverage the large Egyptian multilingual talent pool of 6000k+ graduates, as Egypt is strongly pivoted to serve EMEA due to multi-lingual skills, time zone, and cultural affinity. 
Meanwhile, it also focuses on developing training programs to build talent capabilities in key technologies of high-value specialized services that are gaining traction in Egypt, like artificial intelligence, robotic process automation, big data analytics, mobility, cloud computing, embedded software, and electronic chip design.       
The strategy also includes 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 have kickstarted 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 the key building blocks for development.
This has fueled the local ICT sector's growth and enabled it to demonstrate resilience through the COVID-19 pandemic. This has 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 (MCIT) has launched “Digital Egypt Strategy for the Offshoring Industry 2022-2026” to propel the sector on a higher growth trajectory.