The Minister of Communications and Information Technology Amr Talaat has witnessed, via videoconference, the launch of Digital Egypt Strategy for Offshoring Industry 2022-2026.

The launch event was attended by more than 120 international and local companies and CEOs and senior officials of specialized companies and offshoring service providers.

The strategy is aimed at tripling the export revenue of tech-enabled offshoring services, with 19% compound annual growth rate (CAGR); provide a full suite of incentives to attract investments; and boost the country’s competitiveness in R&D and value-added services in a way that drives the growth of the knowledge economy.

During the event, the ICT Minister said that the Ministry of Communications and Information Technology (MCIT) had discussions with key players in the ICT sector to boost its growth. He highlighted that Egypt has many competitive advantages that increase its chances of becoming a global offshoring leader, given the country’s excellent geographic location and skillful young population.

Talaat stated that over the past few months, MCIT 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 for cooperation with local and international companies to further develop the local offshoring industry.

Moreover, Talaat pointed out the efforts that MCIT has 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 help 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 200,000 people this year, at a 1.1 billion EGP cost, he added.

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 to 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 startups rose by 170%, the ICT Minister said.

The strategy was developed by the Information Technology Industry Development Agency (ITIDA) in collaboration with Ernst & Young. They conducted a thorough and objective study of the Egyptian market and measured and monitored the growing global demand for offshoring services, which is expected to hit $540 billion, at an annual growth rate of 8% to 9%, by 2026.

The strategy stands on three main pillars: talent development, ecosystem development, and marketing and sales. The pillars, collectively, involve nine initiatives aimed at fulfilling the desired objectives, most notably: increasing export revenue from digitally-enabled offshoring services, with 19% CAGR, and creating 215,000 jobs for the offshoring sector.

During the event, ITIDA CEO Amr Mahfouz presented the outcomes of the conducted study and the pillars of the strategy, which was developed in a way that enhances trust and credibility among partners. The strategy team studied the cost structure of the local offshoring industry and compared it with that in other offshoring destinations, helping design more effective programs and incentives to attract investors.

As the strategy was developed, Mahfouz noted, ITIDA was keen on creating increased and sustainable employment opportunities in the outsourcing services industry, with a focus on higher value services; creating a recognizable brand name for Egypt in new and emerging digital services/technologies, namely Artificial Intelligence (AI), advanced analytics and embedded software and chip design; and encouraging investment in those fields.

The strategy features a set of incentives designed from a service provider’s perspective, aimed primarily at improving the overall cost competitiveness of Egypt’s offshoring industry, compared to other destinations. This is in addition to attracting foreign investment and enhancing engagement with existing investors.

Furthermore, the strategy comprises capacity-building and skilling programs and initiatives aimed at qualifying young people and employees in the offshoring sector to meet the requirements of the global market and multinationals. Young people and employees will, also, be trained in different outsourcing fields in-demand languages, based on the needs of each region. The aim is to bridge the skills gap and overcome challenges to cement Egypt as a strong competitor on the global map of the offshoring industry.

During the event, the attendees discussed putting the strategy into effect. Local and international companies operating in Egypt had inquiries on how to leverage and obtain the new incentives and reach the talent pool.

It is worth noting that Egypt is a burgeoning offshoring destination and a major outsourcing hub. The country supports the businesses of hundreds of multinationals and is considered a preferred investment destination for decision-makers when it comes to offshoring customer service.

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