The Disruptive Potential of the Communication Revolution on Entrepreneurship in Egypt
Victor J. Willi | University of Oxford www.victorjwilli.com
Belfer Centre, Harvard University 18 November 2015
New York. September 11 2001
The Middle East in Western perception
Tahrir Square. June 30 2013
Tahrir Square. June 30 2013
Tahrir Square. June 30 2013
Raba‘a al-’Adawiyya. June 30 2013
Raba‘a al-’Adawiyya. June 30 2013
Raba‘a al-’Adawiyya. June 29 2013
Cairo University. July 2 2013
Raba‘a al-’Adawiyya. June 30 2013
Cairo University. June 29 2013
Raba‘a al-’Adawiyya. June 30 2013
Sara Ramadan (27) Journalist
Israa’ ‘Allam (25) Arabic Teacher
Actual Egyptians
with Mai Sirry (35) Entrepreneur
The „entrepreneurial revolution“
the „entrepreneurship ecosystem“
the economics of entrepreneurship
or, maybe better:
„the economic conditions and incentives affecting entrepreneurship, and how the actions of entrepreneurs in
turn affect the broader economy“
Source: World Economic Forum: New Arab Empoloyment Initiative
Second youngest population worldwide growing at the highest growth rate globally
11% overall unemployment
28% youth unemployment
Global youth unemployment
12%
Massive and growing youth unemployment
Egypt
MENA
1980
2030
Source: Burson Marsteller Arab Youth Survey 2015
Unemployment in public perception
What do you believe is the biggest obstacle facing the region?
13.3% (2013)
12.6% (2013)
Unemployment (general)
Source: The World Bank; Google Public Data
The unemployment rate rose from 8.5% (2011) to 13.4% (2014).
Youth unemployment (15-24 years)
Source: The World Bank; Google Public Data
38.9%
600,000 Egyptian youth enter the labour market every year, in need for jobs
Youth unemployment, WOMEN (15-24 years)
Source: The World Bank; Google Public Data
Women earn 26% less the men in the public sector (and 23.2% less in the private sector)
Source: UN, Department of Economic and Social Affairs, Population Division; populationpyramid.net
The „Youth Bulge“
Egypt‘s Population: 84,705,000
MENA 357 million (2015) -> 468 million (2025) Egypt 90 million (2015) -> 160 million (2050)
Source: The World Bank; Google Public Data
Demographic growth, MENA and Egypt (1960-2011)
Average fertility rates in the Arab world are 3.1%, compared to 2.7% globally
Projections:
Mega-Projects The Impact of Climate Change
...
عیش، حریة، عدالة اجتماعیةBread, Freedom, Social Justice
GDP growth (2000-2013)
Egypt’s GDP in 2013, at $272 billion, was roughly a quarter of that of New York ($1.16 trillion)
Source: The World Bank; Google Public Data
6.15% (2014)
2.2% (2014)
GDP per capita (2000-2013)
$63,479 (2013)
$1,467 (2013)
GDP per capita US: $53,041 (2013) GDP per capita CH: $84,815 (2013)
Source: The World Bank; Google Public Data
Comparisons:
Poverty rates rose from 19.6% in 2010 to 26% in 2014
The Government
• military dicatorship • 40,000 people in jail (including women,
gays, Iuslamists and atheists) • Continued crackdown on freedom of
expression and human rights)
Source: www.victorjwilli.com
Economic Policy
Grand infrastructure projects that have little impact on creating inclusive economies.
GDP growth projection according to the GoE
Source: Investor Briefing, Egypt Economic Development Conference (March 2015)
Source: Burson Marsteller Arab Youth Survey 2015
Public confidence in government
How confident are you in the government’s ability to address unemployment?
Mega-Projects The private sector in Egypt
• contributes 62% to Egypt’s GDP. • Microenterprises (1 to 4 employees) account for 91% of private sector • Small and medium enterprises (5 to 500 employees) constitute about 8%
• SMEs share of total bank lending is estimated at 6%, which has ramifications for
inclusive growth
• High levels of systemic corruption • Doing Business Report: Egypt ranks at no. 126 (our of 189)
• There are about about 400 registered companies in the IT segment
• Brain drain: talented young Egyptians leaving the country to try their luck elsewhere
An informational mode of development...
“What is specific to the informational mode of development is the action of knowledge upon knowledge itself as the main source of productivity. Information processing is focused on improving the technology of information processing as a source of productivity, in a virtuous cycle of interaction between the knowledge sources of technology and the application of technology to improve knowledge generation and information processing.” – Manuel Castells, The Rise of the Network Society
The Information Age: Economy, Society, and Culture, Vol. I, II and III
Number of Internet users worldwide
Source: The World Bank; Google Public Data
...operating in an informal economy
In 2009 63.3% of Greater Cairo’s population (17.3 million) lived in informal areas
List of countries with Internet Penetration > 45% (2014)
Internet Penetration
Source: KPCB, Mary Meeker Internet Trends 2015
450,000 (2000) -> 48,300,000 (2015)
Internet, smartphone and FB usage in MENA, Egypt
114 million active users in the MENA countries (September 2015)
12 million (2012) -> 22 million (2015)
Internet and Facebook usage growth in Egypt
Top three Chinese brands sold in Egypt
$66.2
Smartphones in Egypt
Source: Desk research
The „entrepreneurship ecosystem“ in Egypt
GoE UAE
Greek Campus
Outside investors
„We empower people to beat traffic together“
• Uses crowd-sourcing, social interaction and localization to provide users with real-time information to navigate Cairo‘s and Alex’s traffic scene
• Avaliable for iPhone, Android and Blackbery • Currently 1 million registered users • Got acquired by Vodaphone a few months after its launch
• independent, young and grassroots • by engaging with a wide spectrum of the community, ES offers a
much more unique and diverse pespective on the region • provides readers with an alternative perspective on events on the
ground • about to expand across the region (Lebanon, Jordan, Tunisia etc)
Birth rate versus primary school admission rate
• educational content is crowd-sourced
• 80-90% of audience are students
• 600‘000 active users / month • 6 million page views / month • 65% traffic from Egypt, 15%
from Saudi Arabia
www.nafham.com
Source: www.nafham.com
MENA start-up scene 1
Do you intend to start your own business in the next 5 years? If so, in which industry?
Source: Burson Marsteller Arab Youth Survey 2015
MENA start-up scene 2
What should the government do to promote entrepreneurship?
Source: Burson Marsteller Arab Youth Survey 2015
Source: Burson Marsteller Arab Youth Survey 2015
Optimism of Arab Youths
