Egypt: The New IT Outsourcing Destination

Last update: 5:06 a.m. EST Nov. 18, 2008

CAIRO, Egypt, Nov 18, 2008 /PRNewswire via COMTEX/ -- The economics of outsourcing are changing in America and Europe. High employee turnover, eroding profit margins and unreliable communications have led companies that traditionally rely on India and other countries for offshore information technology (IT) services to start looking for something beyond.

As outsourcing to far-flung destinations becomes increasingly expensive, North American companies in particular are open to the idea of nearsourcing their back office operations to countries in similar time zones. Africa is rising to meet the opportunities created by the global economy.

Internet-based tools and associated IT-enabled services make it possible for Africa to actively engage in the growing IT-based economy. Egypt is leading the charge to ensure Africa has a part in global dialogue by fostering an attractive market for outsourcing, one of the fastest growing IT sectors.

"Egypt has built an entire ecosystem to support the country's ICT industry. The availability of a qualified multilingual workforce, excellent infrastructure and political stability has all helped attract companies to invest in Egypt," says Dr Hazem Abdelazim, CEO for ITIDA.

With some unique advantages such as a multilingual workforce (fluent in English, French, German, Spanish, Portuguese, and Dutch); lower labor costs than in surrounding low-cost regions; time zone proximity with the West; and relative familiarity with Western culture over traditional outsourcing destinations like India and China, Egypt's IT sector is forecasted to grow from $889 million in 2006 to $1.3 billion in 2011.

The Egyptian government offers tax breaks and other financial incentives to attract international companies to set up call/service center and business process outsourcing (BPO) operations in Egypt. It also supports the training of staff to handle multinational clients and maintain global standardized work ethics.

Beginning the Journey

In Egypt, the national information and communication technology (ICT) sector is emerging as a role model of deregulation and privatization as well as a catalyst for reform in other sectors. To meet the demands of business, Egypt realized the need to establish a unique, specialized, and modern business park to be the flagship hub for ICT and built the Smart Village in Cairo, which stretches over 600 acres. It is Egypt's first fully operational Technology and Business Park, and the first of its size in the region. It accommodates multinational and local telecommunications and information technology companies, financial institutions and banks, together with related government authorities.

Currently, over 13,000 professionals run the operations of more than 100 Companies and institutions at the Smart Village, and the number is expected to exceed 40,000 by the end of 2014. Egypt is fast moving beyond traditional stereotype and becoming more than just the land of the Pharaohs. It is engaging formally in the international dialog and evolution of global IT. It is creating opportunities for its own citizens, as well as the multinational companies needing a talented workforce around the globe.

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