April 2008 ITIDA Initiatives to encourage IT Exports, Incubation & Innovation Hazem Y. Abdelazim,...

April 2008

ITIDA Initiatives to encourage IT ITIDA Initiatives to encourage IT Exports, Incubation & InnovationExports, Incubation & Innovation

Hazem Y. Abdelazim, MSc, PhD, MBA

Chief Executive Officer

Information Technology Industry Development Agency www.itida.gov.eg

Agenda

Introduction Governing Law Current Organizational functions

Mission Objectives IT Export Strategy Incubation Program ITAC Y2008 Actions


Introduction : Governing LawIntroduction : Governing Law

The Information Technology Industry

Development Agency (ITIDA) is a

governmental entity has been established

via Law 15 of the year 2004.


Mission

By it’s Name : The Agency(Authority) in charge of Developing the Information Technology Industry in Egypt.

Industry = Local Egyptian Companies + Human Capital + Local market + Exports

+ R&D


1. Driver /Developer/ implementer of National IT Export Strategy

2. Developer and Regulator for e-Signature.

3. Regulator for Intellectual Property Rights (IPR) protection

related to software & Databases

4. Promoting and encouraging investments in ICT sector

5. Capacity/Competence Building for local SMEs

ITIDA objectivesITIDA objectives


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

7A.T. Kearney / August 2007

IT Exports Segmentation

Source: A.T. Kearney projections

Egypt’s Target Offshore Services Revenues 2005 – 2010, (US $ million)

$250 mln

$1,085 mlnTargetRevenue

R&D/Engineering

$280 m

Contact Centers

BPO Services

Localization

Arab Content

KPO Services

IT Products

Technical Support

$100 m

$30 m$40 m

$200 m

$75 m

$200 m

$45 m

$115 m

IT Services

CAGR

27%

38%

43%22%

46%

72%

27%

25%

50%

Initialpriorities

Reasons:• BPO/CS

•High Employment Capacity• IT+ Non IT•Geographical Location• Time Zone•Multilingualism

• IT Services• Reasonable local competence• Language Advantage• Growing Gulf Market

Our Approach : Prioritize Focus + Study other sectors


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


IT Exports Ecosystem

MNCs/FDI Local Companies(NGOs)

Education …… Education ……Education….!!!!!!!!!

Human Capital

The International Market


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


IT Export strategy : MNCs Attraction

How ? Hiring World class PR firm for Branding and promotion

of Egypt IT Sector Potential (H&K) Government Incentives Working with international Consultants for Specific

Sector targeted Campaigns : IT Services : AT Kearney BPO : Mc Kinsey


2.10.4

1.01.6

2.90.4

1.31.9

2.80.5

3.01.0

0.52.8

3.62.93.13.1

3.63.0

2.72.62.72.9

2.73.3

3.03.53.6

0.52.9

1.12.7

2.63.3

1.63.6

3.03.2

3.5

0.91.4

1.50.9

0.72.2

1.21.2

0.82.1

0.71.7

2.11.3

0.71.00.90.9

0.60.8

0.60.9

1.11.2

1.00.9

0.91.11.0

2.71.4

2.01.01.1

0.91.4

1.21.1

1.82.1

0.92.3

1.71.8

1.12.12.3

1.71.2

2.21.2

2.32.4

0.90.8

1.11.11.00.9

1.31.91.61.4

1.21.6

1.11.4

0.91.0

2.21.2

2.41.91.9

1.52.7

1.12.0

1.21.3

TurkeyIreland

SpainPortugalPanama

France (T ierNew Zealand

IsraelSouth Africa

GermanyTunisia

AustraliaUK (TierII)

RussiaVietnamJamaica

RomaniaArgentina

GhanaCosta Rica

UAEHungary

PolandMexico

SlovakiaBulgaria

JordanIndonesia

EgyptUS (Tier II)

BrazilCanada

ChileCzech

ThailandSingapore

PhilippinesMalaysia

ChinaIndia

A. T. Kearney’s Offshore Location Attractiveness Index

Financial People Environment

Business Process Experience and Skills

Labor Force Availability

Educational Skills & Language

Attrition Risk

People Skills and Availability

Country Environment (Economic & Political)

Country InfrastructureCultural AdaptabilitySecurity of Intellectual

Property

Business Environment

Assessment Criteria

Index Rankings 2005

Compensation CostsInfrastructure Costs Tax & Regulatory

Costs

Financial Attractiveness

Source: A.T. Kearney 2005 Offshore Location Attractiveness Index, A.T. Kearney analysis


MNCs Investments in Egypt

Company ActivitiesIBM Software Development Centre of 400+ skilled IT

developers

Mentor Graphics Design Centre of 170+ engineers

Intel Regional Platform Definition CentreRegional Software Enablement Lab

Microsoft Developer Support Centre for Regional DevelopersCairo Innovation Centre

CISCO Core competency e-learning institute

Oracle Global Support Centre with 600+ Engineers

Orange Global Support Centre with 1500 Engineers


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

MNCs Investments in Egypt

Value

Chain

Call Centers / BPO

Technical Support Centers / KPO

Internet/Portal Development

System Integration & Customization

Embedded/Mobile/NLP

ERP/SCM/CRMDev. & Consulting

Strategy Support both Ends of the Value Chain

Massive

Workforce

Teleperformance/Exceed/Raya CT/ HSBC CT/Forte’

Equant/Oracle TS/Allied Soft

Microsoft CMIC/Valeo/FT R&D/ SysDsoftSakhr/Imaginet/SWS/RDI/Coltec

Satyam/Wipro/TCS/Epicor/ITSoftITWorks/LinkDev/Giza/MNS


IT Export Strategy : IT Export Strategy : Local CompaniesLocal Companies

GoTo Market Strategy on prioritized Targets

Enterprise capacity Building Programs

SECC Certification (CMMi, COPC, …..)

Training Subsidy for Export activities

Encourage R&D collaboration with Universities(ITAC)

Support in Trade shows/Exhibitions

Individual specialized Participation in International events


The Third and KEY Pillar The Third and KEY Pillar : Human Capital : Human Capital


Everyone in the industry agrees that the IT skill shortage is the number one constraint on the growth of the sector

2

2

3

3

4

4

4

6

6

32

A Survey on the key obstacles & Challenges for the ICT Sector

Source: Stakeholder interviews

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

Basic Education : Primary/preparatory/Secondary

University : Foundation Courses (2/3 years)

University : Specialization / Focus (2 Yrs)

ICT Industry/Market requirements

Skill Gap









ITIProfessional Trng.

Customized Trng.





23A.T. Kearney 11.2007

Ultimately, a combination of solutions will be necessary to address the skill gap

Short Term Impact (0-2 years)

Medium Term Impact (2 – 5 years)

Long-Term Impact (>5 yrs)

Experienced Hires

Quality of Fresh

Graduates

Quantity of Fresh

Graduates

Attract experienced Egyptians from abroad

More corporate input to universities

Support/expand ITI & corporate-backed academies & certification programs

Allow hiring of experienced foreign workers

Offer courses to convert non-IT project managers from other fields Attract

specialized training firms

Broad overhaul of university curriculum

Encourage Diploma-Level Training Institutes

Strengthen K-12 IT Curriculum

Reform incentive systems for professors

Broad K-12 education reform

Increase enrollment at existing universities

Sponsor students to study abroad

Emerging Conclusions

Encourage/expand CMM/ISO certifications

Allow hiring of fresh foreign graduates

Encourage foreign universities to establish in Egypt


EDU-EGYPTEDU-EGYPT

An MoU has been signed between MCIT & MoHE to startImplementation in Y2008 :

• Five Faculties as the First Pilot• Soft/Language Skills across ALL•ERP for CS as a start


Encouraging Innovation, Incubation and R&D

MNCs/FDIMNCs/FDI Local Companies(NGOs)

Education …… Education ……Education….!!!!!!!!!

Human Capital

The International Market

Incubation

TDF

ITAC


AnnualBusiness Plan Competition

Angel Funding(Incubation in SV)

Winners

Incubation Program (Egypt Case Study)

InnovativeIdeas

18-24 Months

Graduation

Technology Development VC Fund50 M$

Best Start-Ups

Sizable, and Competent companies

Expansion to rural areas and governorates outside Cairo


ITACITAC

Universities & Research Centers

ICT Industry

ITIDA / ITAC

Competitive Advantage


ITAC ProgramsITAC Programs

Student Graduation Projects

Summer Training

Product Development Projects

Advanced Research Projects

ITIDA Fellowships

ITACInformation Technology Academia Collaboration

Support

International Patent Filing support


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.


Action items Y2008Action 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


Thank you [email protected]

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April 2008 ITIDA Initiatives to encourage IT Exports, Incubation & Innovation Hazem Y. Abdelazim,...

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