CAIRO: Egypt is making substantial progress in the outsourcing services industry in comparison to European, Middle Eastern and African countries, according to a recent report.
The speedy progress in the outsourcing domain was hailed in several studies, supporting what officials have been saying for the past couple of years: Egypt has the capability to become a major hub for IT outsourcing in the Middle East.
In a recent report, XMG, a global information and communications technology (ICT) research and advisory firm, said Egypt is becoming a key player in the global outsourcing industry, which “is expanding globally to reach $297 billion and expected to reach $450 billion by 2010.
In a statement to the press commenting on the report, Tarek Kamel, minister of communications and information technology, said, “Fostering Egypt’s position on the global IT exports map and capitalizing on the local ICT sector to boost socioeconomic development are two priorities of the Egyptian government.
Last year, an A.T. Kearney study ranked Egypt the 13th most attractive destination to set up offshore service for activities like information technology, business process outsourcing and call centers.
Countries like India have dominated the IT and call center outsourcing market for a good decade, but the focus is quickly shifting to Egypt.
The A.T. Kearney report looked at 50 countries, and found that “Egypt has the largest talent base of any country in the Middle East, and is home to an increasing number of outsourcing centers operated by multinationals.
With the cost of offshoring in places like India on the rise, companies are now looking elsewhere. Thanks to lower labor costs, the increasing availability of business properties and the growing number of people with computer skills, Egypt will likely become the destination of choice for offshore IT businesses.
Chairman of Xceed, Egypt’s leading call center company, Adel Danish previously told Daily News Egypt, “Salaries in India are going up because they are growing very fast. So they are now [in a situation] where they offer lower quality services at higher rates.
Many believe that it is only a matter of time before Egypt is recognized as the next leading location for outsourcing. In the previous report, Danish spoke about the capabilities and the advantages Egypt has over other countries.
“We offer multiple language skills, compared to India. And we don’t have to work night shifts to serve Europe . Egypt to Europe can be like India to the US.
The Egyptian government has seen the potential of a lucrative outsourcing market and has made several reforms to help promote this new niche. They have cut corporate tax from 42 percent to 20 percent and have implemented a number of customs reforms to improve trade.
With the help of industry players, Egypt has also designed an IT curriculum that aims to train 40,000 university graduates a year over three years. It has also set up a competition prize offering three startups a year $50,000 (£25,000) and free resources. These changes have contributed to the rise of new firms and companies that are luring businesses in from abroad.
The Information Technology Industry Development Agency (ITIDA) and the Egyptian Association for IT Exports recently signed an MOU to build up the potential of the association’s member companies in the domain of producing, outsourcing and exporting IT services.
Kamel said Egypt’s ICT sector is growing at a rate exceeding 20 percent annually.
ITIDA Executive President Hazem Abdelazim said that the agency adopted a new marketing approach that helps strengthen means of collaboration with other countries pioneering in the outsourcing field.
The A.T. Kearney study said that the key to this growth is the government’s move to set a target for the country to reach $1.1 billion of the global outsourcing market by 2010.
Egypt has been ranked as the first choice for investors in North Africa and the second choice in the continent after South Africa in the World Investment Prospects Survey 2007-2009 issued by the United Nations Conference on Trade and Development (UNCTAD).
Egypt has already attracted companies such as Cisco, Google, IBM, Microsoft, Oracle and Orange Business Services who are now using the country’s qualified personnel to fill needed positions.
As long as the government continues to develop the IT industry, Egypt stands more than just a good chance of tapping into the offshore IT market, the benefits of which should ideally spill over to the overall economy.
