Information and Communication Technologies for Development (ICT4D)

Acacia

ICTs for Micro, Small and Medium Enterprises Development in Egypt

(IDRC project No. 103848)

Project Profile

Economic Development is dependent on the use of information technologies and on an economy of knowledge. In fact, it is imperative for the companies to capture data-processing tools and communication and information technologies in fields such as promotion, communication, management and training. M/SMEs are still dependent on traditional means in their operations. According to the Arab Human Development Report, 90% of the Arab economy depends on M/SMEs. In Egypt, 99% of the non-agricultural companies are M/SMEs, constituting 80% of the companies in the private sector and cash for 66% of the whole of the labour of the country. The development of M/SMEs is thus a priority for any government that would like to ensure its economic development.

The Egyptian companies face competition which is galloping forward at the national and regional level like in all other emerging economies. The competition posed by the Asian companies on the ground even regarding the local and traditional Egyptian products is huge in terms of quality and price. The Egyptian government also aims to promote exports of its products to highly competitive and very demanding markets like the European market. Thus, mastering the use of ICTs is seen as one of the basic elements for increased competitiveness of the Egyptian companies on the national, regional and international market. Faced with a narrow and progressively shrinking market that is increasingly being subjected to intense foreign competition, it is urgent for SMEs, and the private sector in general, to develop their operations so as to become up to international standards.

The Arab Human Development Report mentions a study that was conducted in 192 countries which concludes that human and social capital are 64% behind economic growth whereas material capital contributes to only 16% of this growth and the remainder is due to the capital of natural resources. In this context, the Egyptian M/SMEs must ensure the development of their technological capacities, access to information and utilization of intelligence and adopt ICTs in their daily operations in order to maintain their existence and become competitive.

This project aims at developing the capacities of the micro, small and medium-sized Egyptian companies (M/SMEs) through the use of the ICTs. The ultimate goal is to make it possible for the Egyptian M/SMEs to generate more employment and to become more competitive and more effective at the national and international levels. By doing this, the project will allow a better comprehension of the advantages of ICTs for the development of M/SMEs in Egypt.

In this project, the Egyptian Ministry of Communications and Information Technologies has proposed to take the lead - under the direction of the ICT Trust Fund – in implementing a series of actions aiming at helping M/SMEs to adopt ICTs. By doing this, an important bulk of knowledge, analyses and data will be produced in order to come up with lessons learned on the strategies and the approaches for the appropriate adoption of ICTs by the M/SMEs in Egypt. The project will also produce tools that will assess the capacities of these companies, as well as tools to assist them in adopting and benefiting from ICT and will give attention to women contractors in order to encourage the presence and the success of the women in the management of M/SMEs. Moreover, the project will offer the participating Egyptian M/SMEs a set of software data-processing tools accompanied with documents that will assist them in appropriately using these tools. This software will be primarily free software available in-line with the needs expressed by the companies. In this regard, the research team will assess the needs of companies based on the economic sector they belong to.

Project Objectives

In general, this proposed project intends to: Build capacity of Egyptian M/SMEs to leverage Information and Communication

Technologies (ICTs) in order to generate employment and create efficient, better-connected and more competitive enterprises.

Through NGOs involvement, identify new socio-economic opportunities that can be leveraged through ICTs.

Establish and maintain a self-supporting Information Society for M/SMEs to encourage employment generation entrepreneurship.

Foster the understanding of the benefits of ICTs by M/SMEs, while actively promoting their usage; and

Assist M/SMEs in connecting to new markets, and have a multiplier effect where the target group creates momentum and raises the standard for the utilization of ICTs in Egypt.

Other specific objectives include: Elaborate and administer a study of M/SMEs needs in terms of ICTs and training. Conduct an awareness program on the benefits of ICTs for M/SMEs

development. Create and deliver a training program. Test and assess the role of NGOs in helping M/SMEs to adopt ICTs. Promote the delivery of some goods and services online. Create and deliver an Awards program to promote the use of ICTs by M/SMEs in

Egypt. Test the use of Mobile devices to deliver information to M/SMEs in Egypt. and assess the impact of ICTs on M/SMEs development.

Expected Results

Primarily, the anticipated results will be in the form of a set of tools making it possible to evaluate the needs of companies in terms of ICTs and trainings on ICTs; a series of training courses and a series of analysis tools.

The development results are actually the enabled companies and their capacity to make better use of ICTs to increase their competitiveness. This anticipated result will be measured by the application of the different evaluation tools envisaged and the result will be known and disseminated. However, the resulting tools will be registered while conducting the research project especially that registration usually takes several years of use.

The real impact on the companies will be perceptible two or three years after the training, the adoption of ICTs and their use in daily work. The project will develop a software kit based on solutions available in OpenSource. This kit will be downloadable for free on the Web site of the project.

Duration and Amount

Duration: June 2006 – July 2008Amount: 450,000 CAD

For additional information, please contact:

Mohab HalloudaUnited Nations Development Program (UNDP)World Trade Centre, 4th floor, Corniche El-Nil, Cairo - Egypt Tel: +20-2-3088218Fax: +20-2-3088166e-mail: mhallouda@mcit.gove.eg

Dr. Adel El-ZaimSenior Program OfficerIDRC-Cairo OfficeP.O. Box 14, Orman, Cairo, EgyptTel: +20 2 336 7051/2/3/4Fax: +20 2 3367056e-mail: aelzaim@idrc.org.eg