Building a Tech Economy is Critical to Egypt’s Future
Newspaper Title: http://www.diplomaticourier.com/
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Wednesday - 16 September 2015
A few months ago, I was among a handful of IBM executives who met in Cairo with Egyptian government officials—among them the ministers for information technology, health, investment, transportation, finance, planning, and energy. What struck me most about the meeting was the ministers’ keen interest in the tech world. They were acutely aware of the importance of using information technology to increase productivity and innovation in the Egyptian economy.
This kind of strategic thinking is critical not just in Egypt but also in emerging economies all around the world.
Modern technologies can transform businesses, government operations, a nation’s critical infrastructure and, indeed, society as a whole—helping developing nations to grow their economies and satisfy the aspirations of their citizens for better lives and more promising futures for their children. However, there remains an IT investment gap between the most developed nations, which invest 3-4% of their GDPs in technology, and the emerging nations, which typically invest 1% or less.
Developing nations have for many years attempted to establish their own domestic tech industries, with limited success in many cases. Some countries sought to manufacture their own computers—an activity that has now largely moved to Asia. Others seek to set up operations for offshore outsourcing of software programming, business process flows, call centers, and help desks. This is lucrative business opportunity in Egypt because of its abundance of university graduates with computer science and language skills, but, for many other countries, it’s not now a viable economic-growth strategy.
However, an important new opportunity is emerging. Because of a handful of disruptive technologies, including cloud computing, analytics and smart phones, the potential exists for nations all around the globe to develop tech economies—societies infused with technology across the spheres of business, government, education and individual empowerment. I believe that every country will need a tech economy strategy to compete and succeed on a global basis in the 21st century.
This opportunity exists because data is emerging as a new natural resource—vital for helping leaders and organizations of all types understand their challenges and opportunities more deeply so they can make better decisions. With sophisticated data analytics capabilities, every nation has the potential to mine this resource, but only if they possess the skills with which to do so.
The cloud and mobile data communications are critical enablers of a tech economy, as well. They make it easier for organizations and individuals to access data and insights anywhere and any time, and to maintain deeper connections with their employees and customers.
Cloud computing enables entrepreneurs to establish businesses without having to buy expensive computers and data storage equipment. They can also take advantage of cloud-based software development platforms, which provide a wide variety of software components—relieving them of the burden of writing all the software they need. The cloud enables them to experiment, innovate, and grow rapidly.
Mobile devices make it possible for governments and businesses to provide services to people who have been hard to reach. One example: Mobile phones and apps are bringing basic banking services, including the ability to get loans, to individuals and small businesses across Africa.
Egypt’s government and business leaders understand the tech economy imperative. Their long-term strategic goals include transforming Egypt into a digital society, developing an IT industry, and establishing Egypt as a global digital hub. Toward these ends, the government plans on investing more than $18.5 billion in the development of the country’s IT and communications infrastructure by 2020. A key priority is improving access to high-speed Internet services. The government is working with telecom operators to expand the reach of fiber-optic cables, which will likely result not only in broader access to services but also in declining prices.
Large global technology companies have an important role to play in helping Egypt and other aspiring nations to establish strong tech economies. This requires not only significant investments in modern technologies but improvements in education at all levels—including updating of university computer science curricula so they are relevant for today’s technologies and business challenges.
While many Egyptian government and business leaders are aware of the benefits of cloud computing, the approach has not yet been adopted widely in the country—or in the region. At IBM, we see a tremendous potential for cloud computing in Egypt and across the Middle East and Africa. This approach enables governments and businesses to access some of the most advanced applications and analytics capabilities available in the world. It gives small and medium-size businesses, a mainstay of Egyptian society, access to the technologies that the biggest businesses possess.
Already, IBM is teaming with the Egyptian Information Technology Industry Development Agency to help local software vendors convert their traditional software products to run in the cloud or create new cloud services. These kinds of public-private partnerships will be critical elements of efforts to build tech economies.
So far, 118 companies are participating. One example is EME International Co., a Cairo-based company that has developed a mobile app called M-Connect, which helps companies engage with their employees. Because M-Connect is a cloud service rather than a traditional software product, EME International’s CEO, Nader Iskandar, hopes to quickly market it not just in Egypt but also throughout North Africa and the Middle East.
IBM has been doing business in Egypt since 1954. We have participated in most of the major information infrastructure projects undertaken by the government, including the national identity card system and the social insurance system; and by private industry, including the banking technology infrastructure. Today, we have six facilities in Egypt, including software development and business process outsourcing. Our newest initiative is a digital sales center in Cairo, where IBMers speaking Arabic, English, French and Portuguese interact with clients throughout the region using digital and social platforms. I envision the center becoming a driver of digital innovation across Egypt and the region.
The global technology business is changing rapidly. In the past, tech companies built distribution networks of local wholesalers, retailers and service providers for handling their hardware and software products. They controlled those networks. Today, IBM offers industry expertise, innovation partnerships and cloud services. That means the distribution networks of the past are becoming less important. In their place, we’re fostering business ecosystems made up of IBM, our business partners, our clients, local entrepreneurs, and government agencies. We don’t control the ecosystems; instead, we enable them.
I believe that this new approach will help Egypt and emerging countries around the world to establish strong tech economies, which, in turn will help them achieve sustainable growth, industrial diversification, and economic inclusiveness. We’re on the verge of a major shift globally, and technology has a critical role to play in it.
Mr. Di Leo is Senior Vice President, Sales & Distribution, for IBM, responsible for Japan and emerging markets. He grew up in Peru and spent most of his IBM career in emerging markets around the world. He has been traveling to Egypt for business for the last 15 years.
