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Egypt is the latest in a long line of countries to set up a government agency to sell its IT services to businesses overseas.Countries such as the Philippines, Russia and Kenya have sent out similar delegations, envious of the spectacular overhaul of Indias economy in the past 10 years, led by technology investment.Amin Khaireldin, a board member of Egypts Information Technology Industry Development Agency, said the country has learned from Indias example.
We studied India carefully and learned two things we need to focus on our talent pool keeping supply ahead of demand, and we need to have a reliable infrastructure, he said. Khaireldin insists Egypt has done both these things.
The government has approached universities, and along with industry help designed an IT curriculum that it hopes will train 40,000 graduates a year over three years.
Significant infrastructure investments, along with the construction of a technology village near Cairo, have attracted the likes of Orange, Vodafone and Alcatel to outsource business processes there.
Internal IT infrastructure investment has grown from USD4bn GBP2bn to USD12bn GBP6bn in the past three years, in part because a strong rupee and rising labour costs in India have led costcutting outsourcers to look elsewhere.
A McKinsey study found that Egypt was the 13th best outsourcing destination globally, and on average 14 per cent cheaper than India.
As well as trying to attract outside investment, the Egyptian government is encouraging internal innovation.
The government has cut corporation tax from 42 per cent to 20 per cent and begun customs reforms to improve trade.
And a competition prize offering three startups a year USD 50,000 GBP 25,000 and free resources has led to a number of innovative new firms.
Raya, an Egyptian startup that began converting voicemails into text then moved into IT services, was launched in 1998 and recently floated on the Cairo stock exchange for about GBP180m.
Stephen Page, chief executive of hardware manufacturer Sapphire, said he has been happy with his companys recent outsourced operations in Egypt.
It has good value, good workers and not too much red tape, he said. We have found the infrastructure is at least as reliable as in India.
But Mark KobayashiHillary, director of the National Outsourcing Association, said there was no noticeable trend of UK companies going to Egypt yet.
They paint a rosy picture but what they have to offer in terms of value and infrastructure is similar to many other countries around the world, he said.
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