Egypt is the best positioned country to take advantage of outsourcing boom, says Yankee Group

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Dubai, UAE – 18 October 2008: Egypt is the Middle East’s clear winner to take advantage of the boom in global outsourcing, already worth an estimated USD $300 billion in 2009 according to Yankee Group, the independent technology and research firm.

In its report titled ‘Can Middle Eastern Countries Fulfill the Eastern Promise,’ Yankee Group examines the strengths and weaknesses of Middle Eastern markets – namely Egypt, UAE, Oman, Bahrain, Jordan and the Kingdom of Saudi Arabia (KSA) – as countries seeking to attract outsourcing dollars to their economies.

Egypt was assessed as having the strongest position based on its young population, sustainable and abundant talent pool of technologically skilled and multi-lingual university graduates. Its geographical position - close to Europe and Asia - coupled with strong government support are also factors which contribute to Egypt being an outsourcing hotspot.

The report’s co-author, senior analyst Tony Marson said: “The Egyptian Government made a concerted effort to develop its ICT Park infrastructure in tandem with the talent pipeline to sustain the outsourcing industry in the long term. Other countries in the region have recognized that Egypt’s Smart Village model is the ‘gold standard’ in ICT Park design and other countries in the region have adopted the concept.”

The report highlights Egypt as the only Middle Eastern country generating a significant number of technical graduates and refers to the UN 2007 Human Development Index (HDI) which ranks 177 countries on the number of tertiary students in the fields of science, engineering, manufacturing and construction. Kuwait scored 33; Qatar, 35; UAE, 39; Bahrain, 41; Oman, 58; Saudi Arabia, 61; Jordan, 86; and Egypt, 112, compared to India, 128 and China, 81.

“Our national ICT sector is emerging as a role model of deregulation and privatization as well as a catalyst for reform in other sectors,” said Dr. Hazem Abdelazim, CEO of Egypt’s Information Technology Industry Development Agency (ITIDA). “The sector has managed to maintain growth rates of up to 20 per cent and attract local and foreign investments of more than US$8 billion over the past three years.”

Marson added: “The government has recognized the need for Egypt to focus its efforts in specific outsourcing markets segments (such as BPO and KPO services) and make it easier for multinationals and IT Service Providers to do business in Egypt. This is illustrated by the acceleration its efforts to not make Egypt a leading regional but also a global player in these markets and that the IFC (the Commercial arm of the World Bank) has named Egypt in its top ten reformers two years running.”

Multi-lingual capabilities are also a key factor in a country’s attractiveness as an outsourcing destination. The Yankee Group highlights Egypt as the ‘only truly multi-lingual country’ in the Arab world when comparing Middle Eastern countries for the seven key languages spoken in the BPO and ITO sectors.
According to the report Egypt has an abundant talent pool of graduates fluent in English, Arabic, French, German, Italian, Spanish and Portuguese, whereas the UAE, KSA, Oman and Bahrain typically only possess English and Arabic language skills. One example of how Egypt’s multi-lingual and technology skills are being used is SpinVox, the innovative technology content company that captures spoken messages and cleverly converts them into text: the company is establishing a business center in Alexandria on Egypt’s north coast.

Other companies using Egypt as a base for software development, technical support contact centers and research facilities include IBM, Intel, Microsoft, Cisco, Oracle, Satyam, Wipro, Orange, Alcatel, Teleperformance and Vodafone, among others.