Egypt to bolster IT offshoring for analytics, AI, app development

In the latest stage of its mega-project to diversify the country’s economy by investing in the tech sector, the Egyptian government is refocusing on its once-thriving offshoring industry, looking in particular to fields including business-process optimisation, AI, and analytics. This has great revenue potential for the country, with analyst firm IDC predicting the global offshoring market will reach US$540 billion in value by 2026, up from US$310 billion in 2019.

Following on from the work undertaken over the past four years as part of its Digital Egypt initiative, which included major investments in ICT education, entrepreneurship and digitalisation of the government itself, the Egyptian government is now setting its sights on developing an integrated, end-to-end digital strategy for its offshoring sector.

Goals include tripling the export revenue from digitally enabled offshoring services, creating 215,000 new jobs, and increasing the country’s competitiveness in areas such as big data analytics and embedded software.

Egypt’s Information Technology Industry Development Agency (ITIDA), working closely with consultancy firm Ernst & Young, has developed a five-year digital strategy designed to unlock the sector’s growth potential. “This strategy looks at two sides of the equation: supply and demand. On the demand side, we looked at which markets would present opportunities for us. On the supply side, we looked at our talent pool to see what skills we had and what new skills we needed to nurture,” says Amr Mahfouz, ITIDA’s CEO and assistant minister for growth and development at Egypt’s Ministry of Communications and Information Technology (MCIT).

Egypt has a track record in offshoring

Egypt has been a long-term, successful provider in the offshoring industry, favoured by large multinationals such as Vodafone, IBM, and Microsoft. According to Kearney’s Global Services Location Index (GSLI) 2021, Egypt occupied the top spot in the Middle East and Africa and 15th place globally. However, before the turbulence of the anti-autocracy Arab Spring uprisings in the early 2010s, Egypt ranked fourth in the world.