Egypt positions itself as a technology service provider
The development of its telecommunications network, a qualified workforce and the country’s commitment to digital transformation are some of the reasons that have made Egypt a rising destination for BPO and ITO services
Choosing the location of shared services or the provision of ITO (information technology outsourcing) and BPO (business process outsourcing) services is far from being an insignificant task.
The selection of the destination country plays an important role in the success of the organization of these services and of the buyer-supplier commercial relationship.
In this sense, Egypt offers a unique combination of advantages, which makes it an ideal destination, gaining ground against some of the main outsourcing service providers, such as India, Malaysia or the Philippines
First, the ICT sector is one of the economic contributors to the fastest growing Egyptian GDP. In 2018, the sector’s global revenues exceeded € 4 billion and this is expected to reach € 5.1 billion in 2020. ICT exports, which include IT services, business process outsourcing (BPO), and business process outsourcing. (KPO), stood at 3,100 million euros in 2017 and could reach 4,550 million in 2020 . The positive performance of the sector has made Egypt one of the fastest developing offshore destinations in the world and its BPO and IT industry is gaining a greater share in the global market. The segment is expected to register an annual growth of 14.2% in the period 2017-2020. An expanding telecommunications network
Egypt represents one of the largest telecommunications markets in Africa; the sector has effective competition and mobile phone penetration rates above 100% . The country’s Internet infrastructure is fairly centralized. State-owned Telecom Egypt owns the country’s telecommunications network and rents licenses to other Internet service providers, such as Orange, Vodafone and Emirati Etisalat.
The Egyptian government is investing heavily to upgrade this network. Internally, the implementation of fiber optic cabling is taking place throughout the country. At the international level, Egypt is at the heart of a global cable network of 15 lines, and the use of increasingly higher quality submarine cables has significantly improved its connectivity ; With a capacity of 60 Tbps per cable, Egypt has a highly efficient connection with more than 60 countries.Source of young talent
The Egyptian market offers attractive outsourcing services thanks to competitive labor costs and a young and highly qualified workforce. More than 500,000 students graduate annually from the 35 universities and 100 technical institutes in the country, and almost half of these graduates carry out their studies in a field related to the BPO (business process outsourcing) sector . In this sense, 95,000 young people complete engineering studies each year, 50,000 in computer science and 67,000 in other scientific disciplines.
In turn, there are numerous cooperation programs promoted by multinational companies operating in the country. Some companies like Cisco or Microsoft periodically partner with educational institutions to offer hands-on training programs. On the other hand, it should be noted that Egyptian students are increasingly multilingual : the majority speak English and a growing number are proficient in French, German, Italian and Spanish. Government-supported innovation
Egyptian start-ups are getting more and more investment from Europe, the United States and other countries in the MENA region (Middle East and North Africa). Among the factors driving this investment are the increase in the level of penetration of smartphones, the development of the Internet of Things (IoT) and big data in the Smart City project of the New Administrative Capital, and the creation of new parks technology and data centerss. Digital transformation plays a central role in the Egyptian government’s strategy, which wants to position the country as an important center for technology services. The European Outsourcing Association rated Egypt in 2016 as an exceptional destination for outsourcing services; That same year, Forbes included it among the 10 best countries for creating start-ups, and the AT Kearney Global Retail Development Index ranked it 30th in the world for its growth potential.Promising prospects for the future
As already noted, the outsourcing industry has grown tremendously in Egypt. Translation services, human resources, finance, engineering and software development are on the rise, and cultural compatibility, physical proximity and a similar time zone have facilitated productive business interactions with European countries. In this way, the sector employs 170,000 employees in this country and provides services for more than 100 different markets in 20 different languages.
BPO centers in Egypt have a much lower staff turnover rate than other global offshoring destinations, ensuring better continuity. Egypt has moved from providing low-value-added services to offering a high-value outsourcing industry, which has significant support from the national government .
Finally, and in relation to the COVID-19 pandemic, the World Economic Forum indicates that this sector has great development potential and will be one of those that encourages the growth of the economy in the coming years, since there are factors outsiders that play in favor of the industry. The growing European demand for these services and its current shortage of qualified professionals, the change in the landscape from shared services to higher value services, as well as the increase in costs in traditional destinations , promise to boost the growth of the transport industry. outsourcing services in Egypt in the near future.
