Silicon Waha, a leading joint stock company, has completed the establishment of the first phase of technological parks in Borg El-Arab and Assiut, with 11 buildings in the former and 12 in the latter.
In an interview with Daily News Egypt, Information Technology Industry Development Agency (ITIDA) CEO Osama Hosni said that Silicon Waha will own 15% of all factories to be established at the parks in order to maximise the company’s revenues and secure funds for future development.
What are the main competitive advantages of the Egyptian market in the information technology industry?
The basis of our work at ITIDA is the development of the communication and information technology sector. Egypt has an abundance of human resources that are needed by the industry, and is supported by the innovative youth. Egypt’s geographical location in the heart of the world and the minimal time differences between here and Europe gives the country even more advantages.
What are you plans for the development of human resources?
The Egyptian presidency recently launched an initiative, which the Ministry of Communications and Information Technology is working to implement through ITIDA in cooperation with civil society organisations and NTI and ITI institutions, to graduate 16,000 entrepreneurs and business leaders. Among the 16,000 young people, 11,000 will be trained via internet applications and 5,000 in the traditional method. The initiative will take five years, and the first year is expected to utilise up to EGP 160m in funds.
This will be done through agreements with international training platforms that can provide youth with skills for the software industry with the aim of increasing the productivity of the sector in terms of software development and outsourcing. The initiative’s platform will be launched during the Cairo ICT 2016.
Moreover, we will coordinate with universities to add some training programmes for youth in their university stages so that graduates are equipped with what the market needs most in terms of skill sets.
We have recently hosted two delegations from Indonesia and Malaysia who represent the biggest investors in the IT sector. They asked us to train 10,000 young people, whom they plan to employ. We are now working to find out what the required skills are to train young people. This proves that Egypt has the potential to become an exporter of manpower in the communications and information technology sector.
What about the electronics industry initiative?
The electronics industry initiative will also be launched during the Cairo ICT 2016. There are five companies that signed agreements with us to begin manufacturing electronics in Egypt. We will announce a package of incentives that will be granted to investors to attract more of them. I want to point out that 50% of the manpower that established the technology parks in Borg El-Arab and Assiut were residents of these areas.
We expect to attract strong foreign investment in the electronics industry in the coming period. The fruits of these investments will ripen in the coming three months.
We have adopted a new investment scheme in the factories in the new technological parks. Silicon Waha, owner of the technological parks, will acquire 15% of the factories there, which will maximise the company’s revenues and secure funds for future expansions.
Will the factories be limited to assembling, or include core manufacturing as well?
We cannot begin manufacturing before first learning assembly processes. But we will not stop there and would rather invest in electronic designing, as we are distinguished on that front. There will be a proportion of local components in the manufacturing process that will increase overtime.
What are the main incentives that attracted investors?
Labour availability and their stability are the main factors attracting investors to the IT industry in Egypt, especially Upper Egyptians, as they have a low turnover rate.
What are the main competing markets for Egypt?
In the software industry, Ireland and India are among our top competitors. Eastern Asian markets compete strongly in electronic manufacturing. We recently invited the Irish ambassador to Cairo to learn more about our capabilities of manpower. This visit resulted in many negotiations with foreign companies that want to benefit from the human resources available in Egypt. More positive results for the software industry will come out in the next six months. We also plan to meet with more ambassadors, especially those who represent countries of markets we aim to enter.
What is the status of the two technological parks in Borg El-Arab and Assiut?
We have completed the first phase there in full. We built 11 buildings in the technological park in Borg El Arab and 12 building in the technological park in Assiut. Both technological parks have a government technology service centre that provides many government services such as civil status services, post, and bill payment.
Furthermore, each technological park has a building designated for companies, which have been occupied by 65%, in addition to a building for innovation and entrepreneurship, which are occupied by 55%. The later includes offices for Eitesal and Flat 6 Labs. There are also buildings for call centres, which are 95% occupied, buildings for the National Telecommunications Regulatory Authority (NTRA), and an office for patents and intellectual rights. The incubators in Borg El-Arab park are 100% full.
You had plans to invest in entrepreneurship through innovation centres. Where do those plans stand?
We earmarked EGP 100m to build innovation centres. The plan included the establishment of four centres with investments worth EGP 25m each over five years. Two centres have already been established in Borg El-Arab and Assiut.
In addition, we will announce a funding and investment scheme for start-ups and entrepreneurship in cooperation with the Social Fund for Development in mid-December.
ITIDA had previously run with the slogan “Egypt On”. Will that be changed?
Yes, it will be changed to “Time for Egypt”. This is a reflection of the significant improvement in Egypt’s investment climate, highlighted by the decisions recently taken by the Supreme Council for Investment.
What is the size of support dedicated to the software exporting programme?
We provided EGP 40m of support to software development companies that export products, which is 10% of the added value of what was exported.
Did the investments into technological parks burden the ITIDA budget?
On the contrary—all investments in technological parks were separate from the ITIDA budget, as they were funded by Silicon Waha, which was established through the cooperation of ITIDA, Ministry of Communications and Information Technology and the New and Urban Communities Authority. Even more, the ministry funded ITIDA’s share.