Recommending a Strategy

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ITIDA Initiatives to encourage IT Exports,
Incubation Innovation
April 2008
Hazem Y. Abdelazim, MSc, PhD, MBA Chief Executive
Officer
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Agenda

• Introduction
• Governing Law
• Current Organizational functions
• Mission
• Objectives
• IT Export Strategy
• Incubation Program
• ITAC
• Y2008 Actions

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Introduction Governing Law

• The Information Technology Industry Development
  Agency (ITIDA) is a governmental entity has been
  established via Law 15 of the year 2004.

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Mission

• By its Name The Agency(Authority) in charge of
  Developing the Information Technology Industry in
  Egypt.
• Industry Local Egyptian Companies
• Human Capital
• Local market
• Exports
• RD

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ITIDA objectives

• Driver /Developer/ implementer of National IT
  Export Strategy
• Developer and Regulator for e-Signature.
• Regulator for Intellectual Property Rights (IPR)
  protection related to software Databases
• Promoting and encouraging investments in ICT
  sector
• Capacity/Competence Building for local SMEs

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National ICT strategy

• Information Society
• initiatives (ICT4D)
• e-Infrastructure
• e-Health
• e-Education
• e-Content
• e-Culture
• e- Readiness
• ICT Indicators
• IT consultation

• IT Export Strategy
• IT Industry Segmentation
• Prioritization
• Three Strategy Pillars
• ITIDA Rolled out programs

MCIT
ITIDA
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IT Exports Segmentation
Our Approach Prioritize ? Focus Study other
sectors
Egypts Target Offshore Services Revenues 2005
2010, (US million)
TargetRevenue
CAGR
1,085 mln

• Reasons
• BPO/CS
• High Employment Capacity
• IT Non IT
• Geographical Location
• Time Zone
• Multilingualism
• IT Services
• Reasonable local competence
• Language Advantage
• Growing Gulf Market

RD/Engineering
100 m
38
Initial priorities
KPO Services
30 m
43
Localization
40 m
22
Arab Content
46
200 m
BPO Services
75 m
72
Technical Support
200 m
27
Contact Centers
115 m
50
250 mln
IT Products
45 m
25
280 m
IT Services
27
Source A.T. Kearney projections
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IT Export Strategy Into Action

• After Identifying the Sector Priorities , namely
  IT Services and BPO (Voice/Non-Voice), a
  concerted action Plan has been rolled out across
  the three Main Pillars
• MNCs leapfrogging
• Locals Capacity Building and Goto Market
  Strategy
• Human Capital Development Skill Gap Closure

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IT Exports Ecosystem
The International Market
Local Companies (NGOs)
MNCs/FDI

Human Capital
Education Education Education.!!!!!!!!!
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IT Export strategy MNCs Attraction

• Why?
• Employment Capacity (leapfrogging)
• Access to Markets
• Branding
• Putting Egypt on the Map
• Chain Reaction
• MNCs culture-know how- processes..etc

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IT Export strategy MNCs Attraction

• How ?
• Hiring World class PR firm for Branding and
  promotion of Egypt IT Sector Potential (HK)
• Government Incentives
• Working with international Consultants for
  Specific Sector targeted Campaigns
• IT Services AT Kearney
• BPO Mc Kinsey

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A. T. Kearneys Offshore Location Attractiveness
Index
Index Rankings 2005
Assessment Criteria
Financial Attractiveness

• Compensation Costs
• Infrastructure Costs
• Tax Regulatory Costs

People Skills and Availability

• Business Process Experience and Skills
• Labor Force Availability
• Educational Skills Language
• Attrition Risk

Business Environment

• Country Environment (Economic Political)
• Country Infrastructure
• Cultural Adaptability
• Security of Intellectual Property

Financial People Environment
Source A.T. Kearney 2005 Offshore Location
Attractiveness Index, A.T. Kearney analysis
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MNCs Investments in Egypt
Company Activities IBM Software Development
Centre of 400 skilled IT developers Mentor
Graphics Design Centre of 170 engineers Intel
Regional Platform Definition
Centre Regional Software Enablement
Lab Microsoft Developer Support Centre for
Regional Developers Cairo Innovation Centre
CISCO Core competency e-learning
institute Oracle Global Support Centre with
600 Engineers Orange Global Support Centre
with 1500 Engineers
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MNCs Investments in Egypt
Company Activities Alcatel Lucent
International Support Centre with 300
Engineers Satyam IT Services with 500
Engineers WIPRO IT Services with 300
Engineers VIAS Automotive E. SW Development
for Valeo EPICOR BPO and Managed Services
SQS Quality management and Testing services
EDS IT Solutions and Services
(450) Teleperformance Global Support Centre
with 2000 employees
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Value Chain
Massive Workforce
Embedded/ Mobile/NLP
Microsoft CMIC/Valeo/FT RD/ SysDsoft Sakhr/Imagin
et/SWS/RDI/Coltec
ERP/SCM/CRM Dev. Consulting
Satyam/Wipro/TCS/Epicor/ITSoft ITWorks/LinkDev/Giz
a/MNS
System Integration Customization
Internet/Portal Development
Technical Support Centers / KPO
Equant/Oracle TS/Allied Soft
Call Centers / BPO
Teleperformance/Exceed/Raya CT/ HSBC CT/Forte
Strategy Support both Ends of the Value Chain
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IT Export Strategy Local Companies

• GoTo Market Strategy on prioritized Targets
• Enterprise capacity Building Programs
• SECC Certification (CMMi, COPC, ..)
• Training Subsidy for Export activities
• Encourage RD collaboration with
  Universities(ITAC)
• Support in Trade shows/Exhibitions
• Individual specialized Participation in
  International events

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The Third and KEY Pillar Human Capital
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Everyone in the industry agrees that the IT skill
shortage is the number one constraint on the
growth of the sector
A Survey on the key obstacles Challenges for
the ICT Sector
Supply of qualified graduates/managers
Real estate availability/cost
Telecom / other infrastructure availability/cost
Company capabilities (marketing/legal, etc.)
Lack of domestic demand
Speed of legal/judicial system
Red-tape/bureaucracy(cost of doing business)
Industry fragmentation(need to
consolidate/cooperate)
Lack of system integrators
Access to finance
Source Stakeholder interviews
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ICT Industry/Market requirements
Skill Gap
University Specialization / Focus (2 Yrs)
University Foundation Courses (2/3 years)
Basic Education Primary/preparatory/Secondary
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ICT Industry/Market requirements
Quantity
Skill Type
Quality
University Specialization / Focus (2 Yrs)
University Foundation Courses (2/3 years)
Basic Education Primary/preparatory/Secondary
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ICT Industry/Market requirements
ITI
Customized Trng.
Professional Trng.
University Specialization / Focus (2 Yrs)
University Foundation Courses (2/3 years)
Basic Education Primary/preparatory/Secondary
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ICT Industry/Market requirements
University Specialization / Focus (2 Yrs)
University Foundation Courses (2/3 years)
Basic Education Primary/preparatory/Secondary
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Ultimately, a combination of solutions will be
necessary to address the skill gap
Emerging Conclusions
Offer courses to convert non-IT project managers
from other fields
Attract experienced Egyptians from abroad
Allow hiring of experienced foreign workers
Attract specialized training firms
Encourage/expand CMM/ISO certifications
Broad overhaul of university curriculum
Reform incentive systems for professors
More corporate input to universities
Broad K-12 education reform
Support/expand ITI corporate-backed academies
certification programs
Encourage foreign universities to establish in
Egypt
Strengthen K-12 IT Curriculum
Sponsor students to study abroad
Encourage Diploma-Level Training Institutes
Increase enrollment at existing universities
Allow hiring of fresh foreign graduates
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EDU-EGYPT

• An MoU has been signed between MCIT MoHE to
  start
• Implementation in Y2008
• Five Faculties as the First Pilot
• Soft/Language Skills across ALL
• ERP for CS as a start

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Encouraging Innovation, Incubation and RD
The International Market
T D F
I T A C
MNCs/FDI
Local Companies (NGOs)
Incubation

Human Capital
Education Education Education.!!!!!!!!!
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Incubation Program (Egypt Case Study)
Annual Business Plan Competition
Angel Funding (Incubation in SV)
Winners
Innovative Ideas
18-24 Months
Best Start-Ups
Graduation
Sizable, and Competent companies
Technology Development VC Fund 50 M
Expansion to rural areas and governorates outside
Cairo
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ITAC
ITIDA / ITAC
Universities Research Centers
ICT Industry
Competitive Advantage
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ITAC Programs
Product Development Projects
ITAC Information Technology Academia
Collaboration
Advanced Research Projects
Support
ITIDA Fellowships
Student Graduation Projects
Summer Training
International Patent Filing support
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Winning Projects Examples

• E- Stock Market Consultant. 
•  Security System Based on Human Iris Structure.
• Advanced Platform For Processing Medical Images
  of the Heart.
• Virtual Tutor.
• Miniature MEMS Spectrometer.
• A Prototype Product for Enhancing the
  Capabilities of MS Project through an Integrated
  Tool Box Kit.
• Web Based Management System for Power Meters
  Measurements.

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Action items Y2008

• Implementation of IT Exports Current programs
• Develop a Comprehensive Info Center for IT
  Industry.
• Web Site overhaul a Nation-Class Portal
• Identify New Competence Clusters for New Programs
• New ideas for Encouraging Local Demand
• More Dialogue with the Local Ecosystem
• Scaling UP incubation and ITAC Programs

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Thank you habdelazim_at_mcit.gov.eg