Egypt Continues IT Outsourcing Push | CIO - Blogs and Discussion
The Middle Eastern country renews its efforts to build up its IT outsourcing industry.
Posted by: Beth Bacheldor in News
Topic: Applications
Blog: Inside IT Outsourcing
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.
Showing posts with label IBM. Show all posts
Showing posts with label IBM. Show all posts
Saturday, October 9, 2010
Monday, September 13, 2010
Country Report: Egypt | Global Finance
Country Report: Egypt | Global Finance
Egypt is turning to information technology to create a knowledge-based economy.
Egypt is one of the world's fastest-growing outsourcing locations. A second major technology park, Maadi, opened this summer in downtown Cairo. ITIDA, which is affiliated with the ministry of communications and information technology, is responsible for attracting foreign direct investment (FDI) to Egypt's IT industry. It has signed an agreement with Intel to transfer technical expertise to Egypt-based companies. Smart Village is home to local units of Microsoft, Cisco, HP, Oracle, SAP and Satyam. China-based Huawei, which develops broadband network solutions, operates a training program with United Arab Emirates-based Etisalat. Telecom Egypt, Vodafone and MobiNil are all represented, as is Raya Holding, formed by the merger of seven local IT and communications companies.
Egypt's economy grew at a 5.9% rate in the second quarter of 2010, boosted by double-digit growth in the construction, IT and telecom sectors. This represented a slight acceleration from 5.8% growth in gross domestic product in the first three months of this year.
Egypt's economy continued growing throughout the global financial crisis, thanks to strong domestic demand and the country's limited integration into the world financial system. With 82 million people, Egypt is the most populous Arab country. It has become a magnet for FDI following sustained economic reforms, which have created a favorable business environment and a stable financial services sector.
As the global economy recovers, the Egyptian government says that improvements in manufacturing exports, tourism and Suez Canal revenues will help to boost growth in gross domestic product to around 6% in the next fiscal year, which ends on June 30, 2011. Egypt could attract as much as $10 billion in FDI in fiscal 2011, with the government aiming to lure more investment from China and India to offset any weakness in Europe. India is already supplying equipment and experts to modernize Egypt's rail network, the most extensive in the Middle East. More than 1,000 Chinese companies are operating in Egypt. In addition, money is pouring in from the oil-exporting countries of the Arab Gulf.
Smart Village is not only a symbol of Egypt's ongoing transformation into a high-tech, knowledge-based economy, but it is also home to a new financial district that could help to boost Cairo's standing as a leading regional financial center. With its broadband fiber optics system, district cooling and uninterrupted power supply, Smart Village has attracted a growing list of financial institutions. Commercial International Bank (CIB), National Bank of Egypt and Delta Rasmala Securities were among the first financial firms to locate in the district, which opened in January 2009.
EFG Hermes, Piraeus Bank and HSBC have since opened offices in Smart Village. By the end of this year, Arab Bank, National Investment Bank, Bank of Alexandria-Sanpaolo and Beltone Financial are expected to open new buildings in the district, according to ITIDA. The Egyptian Exchange and the Financial Supervisory Authority will also be based there.
In May the Egyptian parliament, the People's Assembly, passed a new law regulating PPPs in infrastructure, services and public utility projects. The legislation permits the private sector to build and operate public infrastructure projects for periods of 5–30 years, in return for periodic government payments. PPPs are key to the government's economic reform agenda and will help drive the creation of a long-term funding market, according to the ministry of finance.
Mohamed Tarek, project manager at the ministry's PPP Central Unit, says PPPs promise faster delivery of public infrastructure works, as well as access to additional resources. Other potential benefits include improved efficiency, optimal risk allocation and reduced government borrowing, he told a regional PPP workshop in Jordan in June.
The new legislation will allow a backlog of water treatment and desalination projects to move forward. The National Bank of Egypt will be the principal coordinator and underwriter of loans under the PPP program, in line with an accord with the finance ministry. Other banks can participate in financing PPP projects, but in the event of a shortfall, NBE will underwrite the remainder.
Financing of about $2.6 billion will be necessary for the first wave of schemes expected to go forward under the new law, including wastewater projects, hospitals and schools.
Egypt's first PPP venture will be a $200 million wastewater facility to meet the sanitation needs of New Cairo, a new city being built in the desert to the east of the capital. The project is jointly funded by the IFC, a member of the World Bank, and the UK's Department for International Development.
"This transaction has opened up the market for international investors who are now comfortable to work on PPP projects in Egypt, which will help the country address its growing infrastructure needs by harnessing the strength of the private sector," Moazzam Mekan, IFC manager for the Middle East and North Africa, said in a release. The consortium will build and operate the facility for 20 years before transferring it to Egypt's government.
There are several reasons why Egypt is a magnet for FDI, says Sherif Khalil, head of investor relations at CIB, the country's largest private-sector lender. "In addition to recent economic reforms that have strengthened Egypt's fundamentals and allowed it to safely navigate through the downturn in the world economy, the country possesses strong attributes," Khalil says. These include its ability to continue delivering economic growth through local consumption, its investment-led strategy and underleveraged household and corporate sectors, he says.
"The government is also focusing on improving the quality of life for the people, with aggressive spending on water-treatment plants, hospitals, toll roads and logistics," he says. "We have also seen significant progress in raising debt for the oil and gas sector, as well as petrochemicals." The government has a 20-year master plan, comprising 24 major projects with an estimated cost of $20 billion.
With 4.4 billion barrels of proven oil reserves, Egypt is encouraging foreign oil and gas companies to invest in exploration and production. The government is funding major infrastructure projects in the transportation and energy sectors, including a new international terminal at Cairo airport and a new subway line.
Private-sector growth is equally reliant on small and medium enterprises, as well as foreign-owned companies entering the market, Khalil says. The SME segment contributes more than 70% of the country's GDP growth and more than half of total employment. The Central Bank of Egypt exempts SME lending from its 14% reserve requirements.
Corporate financing is active in the Egyptian market, including mergers and acquisitions and consolidations, says Karim Helal, group CEO of CI Capital Holding, the investment bank arm of CIB. "As the only investment bank owned by a large bank, we have unparalleled access to corporate Egypt," Helal says. "The bank can offer a total financial solution, from credit cards to IPOs and everything in between," he says.
The market for initial public offerings remains a bit subdued, Helal says. "Nonetheless, there is demand for attractive deals that are priced right, and I expect to see a few more IPOs this year," he adds. CI Capital was a lead manager in March for the $163 million capital increase for Housing and Development Bank, which increased the company's free float from 7% to 35%.
Mark Rorison, director and head of research at CI Capital, says Egypt's strength over the long term will come from its strategic location, its dynamic demographics and its ongoing economic reform program. Located at the crossroads of Asia and Africa, as well as an active gateway to Europe, Egypt benefits from Suez Canal revenues. "In that sense, Egypt's economy is linked to global markets, including numerous trade agreements, although the growth is coming mainly from the domestic market," Rorison says.
Nearly 80% of Egypt's population is below the age of 45, and youth implies growth potential, with consumpcorporate sectors, he saystion accounting for the majority of gross domestic product, according to Rorison. In a country with 500,000 weddings a year, there is a big need for housing, he says.
The government's $15 billion stimulus package is directed at improving infrastructure, with $3 billion earmarked for social programs. Egypt is pursuing both a top-down and bottom-up economic growth policy, Rorison says. The country offers entrepreneurs the opportunity to set up businesses without a lot of red tape, he says. "Small businesses are eager to start growing and banks are willing to lend, but the financials are not in place," Rorison notes. "The start-up companies need to get their books in order and become a credible lending proposition." Egypt's agricultural economy could benefit from the consolidation of smaller farms and increased buying power, Rorison says.
Another catalyst for growth could come from public-private partnership initiatives under the new PPP law, he suggests. Foreign investment will continue to be attracted by Egypt's location and its rising consumption, he says.
Despite strong price rises since 2006, the country's energy costs are still relatively low, and water costs are also low, compared with what they would be in other countries in the region, Rorison says. Tourism, a key contributor to the current account, was hit by the global economic downturn, but not as much as expected, and it is bouncing back. "Even the tourists are resilient," Rorison says.
Egypt also has its fiscal house in order, with little external debt and rising foreign reserves, he says. The banking system has the liquidity to support growth in an underleveraged economy.
Cairo-based Arab African International Bank is a gateway for international investment in Egypt and the entire Middle East/ North Africa region. Hassan Abdalla, vice chairman and managing director of AAIB, says there are a number of reasons why Egypt is an attractive destination for FDI. "The country's stable economic climate, reforms and efforts to improve the business climate are evidenced in the World Bank's Doing Business 2010 report," he says. Egypt ranked 24 in "starting a business" in the 2010 report, which was an improvement from a rank of 43 in 2009. It ranked 106 in "ease of doing business" in the latest report, an improvement from 116 a year earlier.
"Egypt has a diversified economy with a big market and high GDP growth, despite the global financial crisis," Abdalla says. "Moreover, there are many untapped business sectors in Egypt where businesses can be profitable and benefit the country at the same time."
AAIB uses its offices in the UAE, both in Dubai and Abu Dhabi, to serve the Gulf region, including Qatar, Bahrain, Kuwait and Oman. The bank recently was mandated to be a lead arranger for a $1 billion Eurobond for a prominent company in Qatar. AAIB also has offices in the UK and Lebanon. The bank's core competence has long been as a corporate and investment bank, but its retail business is undergoing an extensive restructuring and is being reintroduced in a new light. "AAIB is maintaining its edge in the market as a corporate and investment-focused bank," Abdalla says. "However, the retail part of the organization has always been a part of the business. As a bank with a customer-centric culture, we have been the first to issue credit cards in the market, along with many other products directed toward the retail sector," he says.
The outlook for investment banking in Egypt is positive, Abdalla asserts. "I believe that there are a lot of opportunities in Egypt for investment banking in general. Combined with our expertise in the region, this creates outstanding opportunities for us," he says.
Egypt is turning toward the East—to China and India in particular—for trade and investment to offset weakness from Western Europe. "China and India are considered for trade and investment, not only by Egypt but also by the entire world, due to their consistent and impressive growth," Abdalla says.
Although the recovery in the global economy could be slow, Abdalla is bullish on Egypt's economy, with its growing domestic demand. "As has been evident in the past few years, the reform policies implemented by the government and the Central Bank of Egypt have been successful in shielding the Egyptian economy from major disruptions witnessed the world over," he points out. "It is worth noting that Egypt has been able to exceed estimates in GDP growth."
Global investors seeking to expand their holdings in Egypt have a number of attractive sectors to consider. These include tourism, oil and gas, food and beverage, and real estate. The government estimates that the economy grew about 5.3% in the fiscal year through June, up from 4.7% in the previous fiscal year. While growth is still below the 7% average achieved in the three years through June 2008, it could get back close to that level in the current fiscal year, judging by the nearly 6% advance in the first half of calendar year 2010.
"Recovery is progressing much faster than anticipated," finance minister Youssef Boutros-Ghali said in a recent statement. "We were able to secure decent growth, and we were able to outperform our deficit and debt targets in the midst of one of the worst systemic global financial and economic crises."
Egypt is turning to information technology to create a knowledge-based economy.
Near the pyramids at Giza, on the outskirts of Cairo, Egypt's first technology park is changing the desert landscape. A total of 43 modern buildings have been constructed on the 600-acre site, known as Smart Village. Prime minister Ahmed Nazif, who holds a doctorate in computer engineering from McGill University in Canada, inaugurated the latest phase of the project in January. He toured IBM's new business process outsourcing and call center, as well as the premises of the Information Technology Industry Development Agency (ITIDA) and the Information Technology Institute. Thirty more buildings, with signature blue-tinted solar glass, will be erected in Smart Village in the next two years.
Egypt is one of the world's fastest-growing outsourcing locations. A second major technology park, Maadi, opened this summer in downtown Cairo. ITIDA, which is affiliated with the ministry of communications and information technology, is responsible for attracting foreign direct investment (FDI) to Egypt's IT industry. It has signed an agreement with Intel to transfer technical expertise to Egypt-based companies. Smart Village is home to local units of Microsoft, Cisco, HP, Oracle, SAP and Satyam. China-based Huawei, which develops broadband network solutions, operates a training program with United Arab Emirates-based Etisalat. Telecom Egypt, Vodafone and MobiNil are all represented, as is Raya Holding, formed by the merger of seven local IT and communications companies.
Egypt's economy grew at a 5.9% rate in the second quarter of 2010, boosted by double-digit growth in the construction, IT and telecom sectors. This represented a slight acceleration from 5.8% growth in gross domestic product in the first three months of this year.
Egypt's economy continued growing throughout the global financial crisis, thanks to strong domestic demand and the country's limited integration into the world financial system. With 82 million people, Egypt is the most populous Arab country. It has become a magnet for FDI following sustained economic reforms, which have created a favorable business environment and a stable financial services sector.
As the global economy recovers, the Egyptian government says that improvements in manufacturing exports, tourism and Suez Canal revenues will help to boost growth in gross domestic product to around 6% in the next fiscal year, which ends on June 30, 2011. Egypt could attract as much as $10 billion in FDI in fiscal 2011, with the government aiming to lure more investment from China and India to offset any weakness in Europe. India is already supplying equipment and experts to modernize Egypt's rail network, the most extensive in the Middle East. More than 1,000 Chinese companies are operating in Egypt. In addition, money is pouring in from the oil-exporting countries of the Arab Gulf.
Smart Village is not only a symbol of Egypt's ongoing transformation into a high-tech, knowledge-based economy, but it is also home to a new financial district that could help to boost Cairo's standing as a leading regional financial center. With its broadband fiber optics system, district cooling and uninterrupted power supply, Smart Village has attracted a growing list of financial institutions. Commercial International Bank (CIB), National Bank of Egypt and Delta Rasmala Securities were among the first financial firms to locate in the district, which opened in January 2009.
EFG Hermes, Piraeus Bank and HSBC have since opened offices in Smart Village. By the end of this year, Arab Bank, National Investment Bank, Bank of Alexandria-Sanpaolo and Beltone Financial are expected to open new buildings in the district, according to ITIDA. The Egyptian Exchange and the Financial Supervisory Authority will also be based there.
 |
Egypt's Smart Village: CIB was one of the first financial firms to locate there |
Smart Village, with its well-tended lawns and other greenery, waterfalls and artificial lakes, is an example of the private-public partnership (PPP) model, which is expected to play a growing role in Egypt's development. Smart Village is 80% owned by the private sector and 20% by the ministry of communications and information technology.
In May the Egyptian parliament, the People's Assembly, passed a new law regulating PPPs in infrastructure, services and public utility projects. The legislation permits the private sector to build and operate public infrastructure projects for periods of 5–30 years, in return for periodic government payments. PPPs are key to the government's economic reform agenda and will help drive the creation of a long-term funding market, according to the ministry of finance.
Mohamed Tarek, project manager at the ministry's PPP Central Unit, says PPPs promise faster delivery of public infrastructure works, as well as access to additional resources. Other potential benefits include improved efficiency, optimal risk allocation and reduced government borrowing, he told a regional PPP workshop in Jordan in June.
The new legislation will allow a backlog of water treatment and desalination projects to move forward. The National Bank of Egypt will be the principal coordinator and underwriter of loans under the PPP program, in line with an accord with the finance ministry. Other banks can participate in financing PPP projects, but in the event of a shortfall, NBE will underwrite the remainder.
Financing of about $2.6 billion will be necessary for the first wave of schemes expected to go forward under the new law, including wastewater projects, hospitals and schools.
Egypt's first PPP venture will be a $200 million wastewater facility to meet the sanitation needs of New Cairo, a new city being built in the desert to the east of the capital. The project is jointly funded by the IFC, a member of the World Bank, and the UK's Department for International Development.
 |
Rorison: "Egypt's economy is linked to global markets" |
Following international bidding, the government awarded the project to Orasqualia, a consortium comprising Egypt-based Orascom Construction Industries and Aqualia Infrastructure, based in Spain.
"This transaction has opened up the market for international investors who are now comfortable to work on PPP projects in Egypt, which will help the country address its growing infrastructure needs by harnessing the strength of the private sector," Moazzam Mekan, IFC manager for the Middle East and North Africa, said in a release. The consortium will build and operate the facility for 20 years before transferring it to Egypt's government.
There are several reasons why Egypt is a magnet for FDI, says Sherif Khalil, head of investor relations at CIB, the country's largest private-sector lender. "In addition to recent economic reforms that have strengthened Egypt's fundamentals and allowed it to safely navigate through the downturn in the world economy, the country possesses strong attributes," Khalil says. These include its ability to continue delivering economic growth through local consumption, its investment-led strategy and underleveraged household and corporate sectors, he says.
 |
Helal: "I expect to see a few more IPOs this year" |
"The Egyptian government is a pro-business government, and it has encouraged more private investments by streamlining procedures," Khalil says. The government has increased the public infrastructure investment budget. It is committed to modernizing and developing its ports sector, especially considering Egypt's strategic geographic location, Khalil says.
"The government is also focusing on improving the quality of life for the people, with aggressive spending on water-treatment plants, hospitals, toll roads and logistics," he says. "We have also seen significant progress in raising debt for the oil and gas sector, as well as petrochemicals." The government has a 20-year master plan, comprising 24 major projects with an estimated cost of $20 billion.
With 4.4 billion barrels of proven oil reserves, Egypt is encouraging foreign oil and gas companies to invest in exploration and production. The government is funding major infrastructure projects in the transportation and energy sectors, including a new international terminal at Cairo airport and a new subway line.
Private-sector growth is equally reliant on small and medium enterprises, as well as foreign-owned companies entering the market, Khalil says. The SME segment contributes more than 70% of the country's GDP growth and more than half of total employment. The Central Bank of Egypt exempts SME lending from its 14% reserve requirements.
Corporate financing is active in the Egyptian market, including mergers and acquisitions and consolidations, says Karim Helal, group CEO of CI Capital Holding, the investment bank arm of CIB. "As the only investment bank owned by a large bank, we have unparalleled access to corporate Egypt," Helal says. "The bank can offer a total financial solution, from credit cards to IPOs and everything in between," he says.
The market for initial public offerings remains a bit subdued, Helal says. "Nonetheless, there is demand for attractive deals that are priced right, and I expect to see a few more IPOs this year," he adds. CI Capital was a lead manager in March for the $163 million capital increase for Housing and Development Bank, which increased the company's free float from 7% to 35%.
Mark Rorison, director and head of research at CI Capital, says Egypt's strength over the long term will come from its strategic location, its dynamic demographics and its ongoing economic reform program. Located at the crossroads of Asia and Africa, as well as an active gateway to Europe, Egypt benefits from Suez Canal revenues. "In that sense, Egypt's economy is linked to global markets, including numerous trade agreements, although the growth is coming mainly from the domestic market," Rorison says.
Nearly 80% of Egypt's population is below the age of 45, and youth implies growth potential, with consumpcorporate sectors, he saystion accounting for the majority of gross domestic product, according to Rorison. In a country with 500,000 weddings a year, there is a big need for housing, he says.
The government's $15 billion stimulus package is directed at improving infrastructure, with $3 billion earmarked for social programs. Egypt is pursuing both a top-down and bottom-up economic growth policy, Rorison says. The country offers entrepreneurs the opportunity to set up businesses without a lot of red tape, he says. "Small businesses are eager to start growing and banks are willing to lend, but the financials are not in place," Rorison notes. "The start-up companies need to get their books in order and become a credible lending proposition." Egypt's agricultural economy could benefit from the consolidation of smaller farms and increased buying power, Rorison says.
Another catalyst for growth could come from public-private partnership initiatives under the new PPP law, he suggests. Foreign investment will continue to be attracted by Egypt's location and its rising consumption, he says.
Despite strong price rises since 2006, the country's energy costs are still relatively low, and water costs are also low, compared with what they would be in other countries in the region, Rorison says. Tourism, a key contributor to the current account, was hit by the global economic downturn, but not as much as expected, and it is bouncing back. "Even the tourists are resilient," Rorison says.
Egypt also has its fiscal house in order, with little external debt and rising foreign reserves, he says. The banking system has the liquidity to support growth in an underleveraged economy.
Cairo-based Arab African International Bank is a gateway for international investment in Egypt and the entire Middle East/ North Africa region. Hassan Abdalla, vice chairman and managing director of AAIB, says there are a number of reasons why Egypt is an attractive destination for FDI. "The country's stable economic climate, reforms and efforts to improve the business climate are evidenced in the World Bank's Doing Business 2010 report," he says. Egypt ranked 24 in "starting a business" in the 2010 report, which was an improvement from a rank of 43 in 2009. It ranked 106 in "ease of doing business" in the latest report, an improvement from 116 a year earlier.
"Egypt has a diversified economy with a big market and high GDP growth, despite the global financial crisis," Abdalla says. "Moreover, there are many untapped business sectors in Egypt where businesses can be profitable and benefit the country at the same time."
AAIB uses its offices in the UAE, both in Dubai and Abu Dhabi, to serve the Gulf region, including Qatar, Bahrain, Kuwait and Oman. The bank recently was mandated to be a lead arranger for a $1 billion Eurobond for a prominent company in Qatar. AAIB also has offices in the UK and Lebanon. The bank's core competence has long been as a corporate and investment bank, but its retail business is undergoing an extensive restructuring and is being reintroduced in a new light. "AAIB is maintaining its edge in the market as a corporate and investment-focused bank," Abdalla says. "However, the retail part of the organization has always been a part of the business. As a bank with a customer-centric culture, we have been the first to issue credit cards in the market, along with many other products directed toward the retail sector," he says.
The outlook for investment banking in Egypt is positive, Abdalla asserts. "I believe that there are a lot of opportunities in Egypt for investment banking in general. Combined with our expertise in the region, this creates outstanding opportunities for us," he says.
Egypt is turning toward the East—to China and India in particular—for trade and investment to offset weakness from Western Europe. "China and India are considered for trade and investment, not only by Egypt but also by the entire world, due to their consistent and impressive growth," Abdalla says.
Although the recovery in the global economy could be slow, Abdalla is bullish on Egypt's economy, with its growing domestic demand. "As has been evident in the past few years, the reform policies implemented by the government and the Central Bank of Egypt have been successful in shielding the Egyptian economy from major disruptions witnessed the world over," he points out. "It is worth noting that Egypt has been able to exceed estimates in GDP growth."
Global investors seeking to expand their holdings in Egypt have a number of attractive sectors to consider. These include tourism, oil and gas, food and beverage, and real estate. The government estimates that the economy grew about 5.3% in the fiscal year through June, up from 4.7% in the previous fiscal year. While growth is still below the 7% average achieved in the three years through June 2008, it could get back close to that level in the current fiscal year, judging by the nearly 6% advance in the first half of calendar year 2010.
"Recovery is progressing much faster than anticipated," finance minister Youssef Boutros-Ghali said in a recent statement. "We were able to secure decent growth, and we were able to outperform our deficit and debt targets in the midst of one of the worst systemic global financial and economic crises."
Egypt seeks to bridge the nanotechnology divide
Egypt seeks to bridge the nanotechnology divide
08 September 2010
CAIRO: As the technology sector continues expanding in Egypt, a concerted effort has been made to forge ahead in the field of nanotechnology. As well as capitalizing on the potential benefits of nanotechnology, Egypt is hoping to avoid falling through the crack of what scientists have termed the "nanodivide."
Hassan Azzazy, professor and chairman of the chemistry department at the American University in Cairo (AUC), underscored the dilemma: "Egypt is falling behind," he said, as research and development only represent 0.5 percent of GDP, which is "miniscule."
"Egypt must enter heavily into the field now, or risk losing out" by having to invest even more funds in the future to catch up to the west. "The longer we wait, the harder it will be," Mohamed Abdel-Mottaleb, chairman of SabryCorp, told Daily News Egypt.
In 2007, the global nanotechnology market was worth $148 billion; since that time, however, different organizations have arisen that use divergent variables to establish a figure, and as a result, there has been discord in reaching a consensus, noted Abdel-Mottaleb. In either case, Egypt's slice of that pie is crumb-sized.
"For industrial countries, nanotechnology merely represents a matter of lifestyle, while for developing countries, it is a matter of life itself," he added.
Individuals such as Abdel-Mottaleb and Azzazy have set out to ensure that nanotechnology will be used to alleviate some of the ubiquitous, overwhelming problems faced by emerging economies like Egypt, and to eschew being left in the dust by industrialized countries.
Saving time, money and lives
Nanotechnology applications are portentous, especially for developing nations, and can be applied to a panoply of industries: from healthcare to sanitation to construction to agriculture -- just to name a few.
To illustrate, the technology, with which scientists create new materials and products by tinkering around at the molecular level, can be used to improve the cleanliness of buildings facades by making them dirt-resistant -- or 40 percent cleaner.
The technology can also destroy pollution through the use of a special paint infused with nanomaterials that create a photochemical reaction when the two come into contact. This reaction "disarms" pollution -- a highly enticing concept for cities suffering dense air pollution, Abdel-Mottaleb explained.
Painting interior walls with nanoinfused paint increases insulation to keep cool air inside, which can reduce energy consumption by 40 percent. This is a particularly salient application in Egypt, which is facing increasing pressure to meet the growing national energy demand.
In the world of medicine, nanotechnology will be used for "drug targeting," which means a nanodrug carrier will be programmed with extreme precision to seek out and destroy infected cells for all types of illnesses, such as HIV, thereby making treatment more effective and efficient.
A plastic devise currently being developed called "lab on a chip," costing about $10, will allow medical staff to detect up to 10,000 different illnesses within minutes from examining one drop of blood.
This represents a major boon for developing countries, which face significant challenges regarding the equitable distribution of health services throughout the country. Indeed, it is a hefty economic burden for the poor rural populations to halt work to access treatment in city centers.
The technology will be delivered to the person in need, Abdel-Mottaleb said, and provide continuous healthcare. "Instead of a 'point of sale,' you have 'point of health,'" he said.
This is particularly crucial for those may have contracted Hepatitis C, a prevalent illness in Egypt, with around 10 million cases. "Many can't get treatment, and when they do, the diagnosis comes too late," said Abdel-Mottaleb. But with a targeting system, the diagnosis could be attained in 30 minutes, added Azzazy.
In a nutshell, "You save time, money and lives," Abdel-Mottaleb stated.
In a best-case scenario, these applications could be implemented in three to four years if the technology is developed indigenously; if it must be imported, it could take up to 15-20 years, he highlighted. The argument for immediate funds and heightened focus on research is therefore overwhelmingly clear.
Weighing the risks
The benefits of the applications are certainly palpable, but the risks mustn't be discounted. The regulatory framework for nanomaterials in Egypt is currently nonexistent, as both Azzazy and Abdel-Mottaleb said.
Yet, they are confident that regulations will be established once the need arises, and to guarantee that Egyptian regulations are up to international norms, they will be based on EU and US standards, which in turn will be adapted to local needs.
Concerns have been flagged as regards the impact of free nanoparticles that enter the natural environment -- when products containing nanomaterials, for example, begin to decompose in landfills or when humans consume medicinal products containing nanodrug carriers.
Abdel-Mottaleb affirmed that this is a grave concern, but the industry has made a serious move to address these issues. He admitted though that, at best, little is known about the technology's risks. Nonetheless, by 2018 nanomaterials will be prevalent in a myriad of products, according to industry predictions.
Abdel-Mottaleb attempted to assuage fears, stating that the Egyptian government and researchers would apply the precautionary principle when creating and introducing new products with nanomaterials into the market.
Unifying local talent
In spite of the dire warnings of failing to bridge the nanodivide and concerns over human health and the environment, inroads are, in fact, being made.
The Information Technology Industry Development Agency (ITIDA) and IBM teamed up to create Egypt's first national research lab, launched in 2008, to the tune of LE 300 million in seed money for the first three years, explained Ahmed Tantawy, executive director of the Egyptian Center for Nanotechnology and director of research at IBM.
The research lab will focus on creating nanotechnology applications for a range of international and local clients. The aim is have an impact on the national economy versus producing endless reams of research papers, explained Tantawy.
Two key areas of research, for instance, include renewable energy solutions, such as solar technology, as well as water desalination in addition to manufacturing applications.
Tantawy said the lab would be fully operational by the end of 2011, at which point "serious research work" will begin.
The establishment of the lab signifies a serious stride forward into the nanotechnology realm for Egypt, he said, nevertheless, more money is required. Future funds, however, will be sought from the lab's growing base of clients rather than from the government.
Abdel-Mottaleb and Azzazy believe that if a national plan were established, through coordination and consolidation of Egypt's talent pool as well as shoring up supplementary funds, the glimmer of hope for the country in nanotechnology would be a tad brighter.
Citing Iran as an example, Abdel-Mottaleb explained that in 2003 the country was ranked 134 internationally, but now it has swiftly climbed the ladder to 16 thanks to the country's national nanotechnology initiative.
Thus, as Abdel-Mottaleb stressed, in a span of six to seven years, Iran has become a major nanotechnology force. As he put it, "They had a critical mass, got organized, and created local knowledge instead of importing it."
Evidence of such a strategy seems to be emerging, as a symbiosis and exchange is occurring between the recently established Nile University nanotechnology program --under Abdel-Mottaleb's direction, which is the first in the Middle East and Africa -- the IBM research center as well as the nanoscience research being conducted at AUC.
If these efforts are unsuccessful in helping Egypt get a leg up on the nanotechnology competition, it would both bode poorly for the country's downtrodden and also represent a missed opportunity for Egypt to contribute to, what Abdel-Mottaleb calls "the renaissance of science."
By Christopher Le Coq
© Daily News Egypt 2010
08 September 2010
CAIRO: As the technology sector continues expanding in Egypt, a concerted effort has been made to forge ahead in the field of nanotechnology. As well as capitalizing on the potential benefits of nanotechnology, Egypt is hoping to avoid falling through the crack of what scientists have termed the "nanodivide."
Hassan Azzazy, professor and chairman of the chemistry department at the American University in Cairo (AUC), underscored the dilemma: "Egypt is falling behind," he said, as research and development only represent 0.5 percent of GDP, which is "miniscule."
"Egypt must enter heavily into the field now, or risk losing out" by having to invest even more funds in the future to catch up to the west. "The longer we wait, the harder it will be," Mohamed Abdel-Mottaleb, chairman of SabryCorp, told Daily News Egypt.
In 2007, the global nanotechnology market was worth $148 billion; since that time, however, different organizations have arisen that use divergent variables to establish a figure, and as a result, there has been discord in reaching a consensus, noted Abdel-Mottaleb. In either case, Egypt's slice of that pie is crumb-sized.
"For industrial countries, nanotechnology merely represents a matter of lifestyle, while for developing countries, it is a matter of life itself," he added.
Individuals such as Abdel-Mottaleb and Azzazy have set out to ensure that nanotechnology will be used to alleviate some of the ubiquitous, overwhelming problems faced by emerging economies like Egypt, and to eschew being left in the dust by industrialized countries.
Saving time, money and lives
Nanotechnology applications are portentous, especially for developing nations, and can be applied to a panoply of industries: from healthcare to sanitation to construction to agriculture -- just to name a few.
To illustrate, the technology, with which scientists create new materials and products by tinkering around at the molecular level, can be used to improve the cleanliness of buildings facades by making them dirt-resistant -- or 40 percent cleaner.
The technology can also destroy pollution through the use of a special paint infused with nanomaterials that create a photochemical reaction when the two come into contact. This reaction "disarms" pollution -- a highly enticing concept for cities suffering dense air pollution, Abdel-Mottaleb explained.
Painting interior walls with nanoinfused paint increases insulation to keep cool air inside, which can reduce energy consumption by 40 percent. This is a particularly salient application in Egypt, which is facing increasing pressure to meet the growing national energy demand.
In the world of medicine, nanotechnology will be used for "drug targeting," which means a nanodrug carrier will be programmed with extreme precision to seek out and destroy infected cells for all types of illnesses, such as HIV, thereby making treatment more effective and efficient.
A plastic devise currently being developed called "lab on a chip," costing about $10, will allow medical staff to detect up to 10,000 different illnesses within minutes from examining one drop of blood.
This represents a major boon for developing countries, which face significant challenges regarding the equitable distribution of health services throughout the country. Indeed, it is a hefty economic burden for the poor rural populations to halt work to access treatment in city centers.
The technology will be delivered to the person in need, Abdel-Mottaleb said, and provide continuous healthcare. "Instead of a 'point of sale,' you have 'point of health,'" he said.
This is particularly crucial for those may have contracted Hepatitis C, a prevalent illness in Egypt, with around 10 million cases. "Many can't get treatment, and when they do, the diagnosis comes too late," said Abdel-Mottaleb. But with a targeting system, the diagnosis could be attained in 30 minutes, added Azzazy.
In a nutshell, "You save time, money and lives," Abdel-Mottaleb stated.
In a best-case scenario, these applications could be implemented in three to four years if the technology is developed indigenously; if it must be imported, it could take up to 15-20 years, he highlighted. The argument for immediate funds and heightened focus on research is therefore overwhelmingly clear.
Weighing the risks
The benefits of the applications are certainly palpable, but the risks mustn't be discounted. The regulatory framework for nanomaterials in Egypt is currently nonexistent, as both Azzazy and Abdel-Mottaleb said.
Yet, they are confident that regulations will be established once the need arises, and to guarantee that Egyptian regulations are up to international norms, they will be based on EU and US standards, which in turn will be adapted to local needs.
Concerns have been flagged as regards the impact of free nanoparticles that enter the natural environment -- when products containing nanomaterials, for example, begin to decompose in landfills or when humans consume medicinal products containing nanodrug carriers.
Abdel-Mottaleb affirmed that this is a grave concern, but the industry has made a serious move to address these issues. He admitted though that, at best, little is known about the technology's risks. Nonetheless, by 2018 nanomaterials will be prevalent in a myriad of products, according to industry predictions.
Abdel-Mottaleb attempted to assuage fears, stating that the Egyptian government and researchers would apply the precautionary principle when creating and introducing new products with nanomaterials into the market.
Unifying local talent
In spite of the dire warnings of failing to bridge the nanodivide and concerns over human health and the environment, inroads are, in fact, being made.
The Information Technology Industry Development Agency (ITIDA) and IBM teamed up to create Egypt's first national research lab, launched in 2008, to the tune of LE 300 million in seed money for the first three years, explained Ahmed Tantawy, executive director of the Egyptian Center for Nanotechnology and director of research at IBM.
The research lab will focus on creating nanotechnology applications for a range of international and local clients. The aim is have an impact on the national economy versus producing endless reams of research papers, explained Tantawy.
Two key areas of research, for instance, include renewable energy solutions, such as solar technology, as well as water desalination in addition to manufacturing applications.
Tantawy said the lab would be fully operational by the end of 2011, at which point "serious research work" will begin.
The establishment of the lab signifies a serious stride forward into the nanotechnology realm for Egypt, he said, nevertheless, more money is required. Future funds, however, will be sought from the lab's growing base of clients rather than from the government.
Abdel-Mottaleb and Azzazy believe that if a national plan were established, through coordination and consolidation of Egypt's talent pool as well as shoring up supplementary funds, the glimmer of hope for the country in nanotechnology would be a tad brighter.
Citing Iran as an example, Abdel-Mottaleb explained that in 2003 the country was ranked 134 internationally, but now it has swiftly climbed the ladder to 16 thanks to the country's national nanotechnology initiative.
Thus, as Abdel-Mottaleb stressed, in a span of six to seven years, Iran has become a major nanotechnology force. As he put it, "They had a critical mass, got organized, and created local knowledge instead of importing it."
Evidence of such a strategy seems to be emerging, as a symbiosis and exchange is occurring between the recently established Nile University nanotechnology program --under Abdel-Mottaleb's direction, which is the first in the Middle East and Africa -- the IBM research center as well as the nanoscience research being conducted at AUC.
If these efforts are unsuccessful in helping Egypt get a leg up on the nanotechnology competition, it would both bode poorly for the country's downtrodden and also represent a missed opportunity for Egypt to contribute to, what Abdel-Mottaleb calls "the renaissance of science."
By Christopher Le Coq
© Daily News Egypt 2010
Tuesday, August 24, 2010
Egypt Builds Reputation as Innovation Powerhouse
Egypt Builds Reputation as Innovation Powerhouse
"Egypt recognizes that a country's capacity for innovation and entrepreneurship is a critical contributor to success in today's competitive global marketplace," said Dr. El-Sadany. "That's why Egypt has invested heavily in the education and training over the past decade, resulting in a highly technical, multilingual workforce, a modern and safe business environment and cost-competitive services that foster the free flow of business innovation."
Dr. El-Sadany adds, "With the government's backing and support, Egypt will help companies and organizations by providing an environment where innovators and entrepreneurs can thrive. Through multinational collaboration and partnerships, entrepreneurs will focus on building ground-breaking business models and further creating or developing existing capabilities to solve problems. Egypt has so much to offer and, together with our clients, ITIDA is the guiding force for technology innovation, investment and development across Egypt."
Raising the benchmark on technology innovation
Contributing to the country's groundwork towards becoming a hub for innovation, Egypt built the Smart Village, a modern business park outside Cairo that spreads over 32 million square feet. Currently home to 120 entities including over 20 multi-national companies and 28,000 professionals, it is expected to host more than 500 companies and more than 100,000 employees by 2014. Additional projects include:
"Egypt recognizes that a country's capacity for innovation and entrepreneurship is a critical contributor to success in today's competitive global marketplace," said Dr. El-Sadany. "That's why Egypt has invested heavily in the education and training over the past decade, resulting in a highly technical, multilingual workforce, a modern and safe business environment and cost-competitive services that foster the free flow of business innovation."
Dr. El-Sadany adds, "With the government's backing and support, Egypt will help companies and organizations by providing an environment where innovators and entrepreneurs can thrive. Through multinational collaboration and partnerships, entrepreneurs will focus on building ground-breaking business models and further creating or developing existing capabilities to solve problems. Egypt has so much to offer and, together with our clients, ITIDA is the guiding force for technology innovation, investment and development across Egypt."
Raising the benchmark on technology innovation
Contributing to the country's groundwork towards becoming a hub for innovation, Egypt built the Smart Village, a modern business park outside Cairo that spreads over 32 million square feet. Currently home to 120 entities including over 20 multi-national companies and 28,000 professionals, it is expected to host more than 500 companies and more than 100,000 employees by 2014. Additional projects include:
- In the Smart Village, major institutions offering ICT-related programs are Nile University, the Information Technology Institute and the National Telecommunication Institute, all of which create an educational environment conducive to creative research and critical thinking.
- The Innovation and Entrepreneurship Center (IEC) was formed in association with academia, the government, and the private sector to develop and support Egypt's workforce through educational, technological and financial resources. As part the IEC, viable ICT start-ups can receive support (such as funding space in the Smart Village incubator buildings), expertise in taking a product or service to market, and help with intellectual property protection.
- The Technology Development Fund (TDF) is a public-private partnership, which is ITIDA's initial step in building an ICT venture capital industry in Egypt. Outside of TDF's involvement, other venture capital funds in Jordan, Saudi Arabia and the United Arab Emirates invest in innovative Egyptian ICT ventures. With the aim of structuring investment opportunities, the country is continuously seeking experienced venture capital firms and experts, as well as the formation of new venture capital firms.
- The Global Entrepreneurship Program (GEP) was recently established by the US government in order to coordinate efforts to promote entrepreneurship around the world. President Obama selected Egypt to be the GEP's first pilot program.
- Egypt's Nanotechnology Center (EGNC) was launched in 2008 as a partnership among IBM, Cairo University, Nile University, and with support from ITIDA and the Science and Technology Development Fund. The center's research focuses on simulation and modeling software, alternative energy and energy recovery for desalination.
Sunday, August 1, 2010
INTERVIEW-Languages, alliances key to IBM Egypt BPO offering | News by Country | Reuters
INTERVIEW-Languages, alliances key to IBM Egypt BPO offering | News by Country | Reuters
* Language skills make Cairo ideal multilingual site
* Egypt tiny but growing in business processing
* Graduate flow, career progression limits wage inflation risk
By Alastair Sharp
CAIRO, July 28 (Reuters) - Egypt's language skills and good working relationships between government, business and academia make it a strategic choice for growth, an IBM (IBM.N: Quote) executive in charge of Egyptian business process operations (BPO) said.
Egypt is eager to develop its IT and related sectors with a view to bringing in $10 billion a year from offshoring by 2020.
"Egypt is one of the strategic locations we have to improve our global footprint for BPO," Egypt business process delivery manager David Brooks said in an interview on Wednesday.
Brooks, who worked for IBM in South Africa for four years, said Egypt had better cooperation between industry, government and universities and a broader cache of languages to draw on.
"In Egypt you get French, German, Italian, Spanish, some Japanese, some Russian -- a wide range of languages," he said.
While IBM's BPO operations in Egypt are dwarfed by its presence in global giants such as India and the Philippines, it is entrenched in the country and helping educate its graduates.
Foreign investors sometimes complain of a skills gap in Egypt and say they have to pay a premium to secure recruits with the right technical and language skills.
"Our strategy says English will go to India, but for any client (with diverse language needs) happy with near native (language skills) we would certainly recommend Egypt as a destination for a BPO business."
Brooks said IBM has 32,000 BPO employees in India and around 600 in Egypt. "It is very small but it is just growing."
Technology firm executives see growth potential in the Arabic web, while tech-savvy youngsters with native Arabic and additional languages are a vital resource. [ID:nLDE63J0FO]
Illustrating the point, IBM last month inked a deal to provide web portal Yahoo (YHOO.O: Quote) with customer care services for Europe, the Middle East and North Africa.
Yahoo had pitched to the market without a location specified and IBM won the contract by pitching Egypt, Brooks said.
Yahoo bought Arabic-language portal Maktoob.com last year.
WAGE INFLATION RISK LIMITED An International Labour Organisation (ILO) study published this month said offshoring and outsourcing has been a boon to developing countries, offering double the average pay in other areas of the formal economy. [ID:nLDE66B1M2]
Brooks said he is not worried wage inflation could spiral, as is happening in India, as Egypt is churning out more than 300,000 graduates a year, many eager to enter what is perceived as a solid industry with promise of career progression.
"As long as the government and the universities continue to feed the marketplace with all these thousands and thousands of new graduates that speak the languages there is no need for me to try to attract people from competitors," he said.
In addition to IBM's relatively new Egypt BPO unit, the firm also established a nanotechnology centre with a $30 million joint investment with the government in 2009.
"The nanotechnology lab is sending Egyptian scientists and experts out to IBM's labs in Zurich and New York and across in California, that's got to be pretty important for Egypt and for Egyptians," he said. (Reporting by Alastair Sharp; Editing by Mike Nesbit)
* Language skills make Cairo ideal multilingual site
* Egypt tiny but growing in business processing
* Graduate flow, career progression limits wage inflation risk
By Alastair Sharp
CAIRO, July 28 (Reuters) - Egypt's language skills and good working relationships between government, business and academia make it a strategic choice for growth, an IBM (IBM.N: Quote) executive in charge of Egyptian business process operations (BPO) said.
Egypt is eager to develop its IT and related sectors with a view to bringing in $10 billion a year from offshoring by 2020.
"Egypt is one of the strategic locations we have to improve our global footprint for BPO," Egypt business process delivery manager David Brooks said in an interview on Wednesday.
Brooks, who worked for IBM in South Africa for four years, said Egypt had better cooperation between industry, government and universities and a broader cache of languages to draw on.
"In Egypt you get French, German, Italian, Spanish, some Japanese, some Russian -- a wide range of languages," he said.
While IBM's BPO operations in Egypt are dwarfed by its presence in global giants such as India and the Philippines, it is entrenched in the country and helping educate its graduates.
Foreign investors sometimes complain of a skills gap in Egypt and say they have to pay a premium to secure recruits with the right technical and language skills.
"Our strategy says English will go to India, but for any client (with diverse language needs) happy with near native (language skills) we would certainly recommend Egypt as a destination for a BPO business."
Brooks said IBM has 32,000 BPO employees in India and around 600 in Egypt. "It is very small but it is just growing."
Technology firm executives see growth potential in the Arabic web, while tech-savvy youngsters with native Arabic and additional languages are a vital resource. [ID:nLDE63J0FO]
Illustrating the point, IBM last month inked a deal to provide web portal Yahoo (YHOO.O: Quote) with customer care services for Europe, the Middle East and North Africa.
Yahoo had pitched to the market without a location specified and IBM won the contract by pitching Egypt, Brooks said.
Yahoo bought Arabic-language portal Maktoob.com last year.
WAGE INFLATION RISK LIMITED An International Labour Organisation (ILO) study published this month said offshoring and outsourcing has been a boon to developing countries, offering double the average pay in other areas of the formal economy. [ID:nLDE66B1M2]
Brooks said he is not worried wage inflation could spiral, as is happening in India, as Egypt is churning out more than 300,000 graduates a year, many eager to enter what is perceived as a solid industry with promise of career progression.
"As long as the government and the universities continue to feed the marketplace with all these thousands and thousands of new graduates that speak the languages there is no need for me to try to attract people from competitors," he said.
In addition to IBM's relatively new Egypt BPO unit, the firm also established a nanotechnology centre with a $30 million joint investment with the government in 2009.
"The nanotechnology lab is sending Egyptian scientists and experts out to IBM's labs in Zurich and New York and across in California, that's got to be pretty important for Egypt and for Egyptians," he said. (Reporting by Alastair Sharp; Editing by Mike Nesbit)
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