Enabling Entrepreneurship in Egypt: Toward a Sustainable Dynamic Model

The objective of this report is to assess the current status of entrepreneurship in Egypt, and to offer strategic and actionable recommendations that will enable entrepreneurship and significantly impact the Egyptian economy.

The report offers a fresh look at entrepreneurship in Egypt and the support mechanisms currently at play, assesses the initiatives and challenges at hand, and provides multilevel recommendations on how to tackle them.

On a deeper level, this work aims to constructively question the entire model by which we view the tasks of entrepreneurial support in Egypt and develops a new mechanism to replace the existing model currently in operation. This is a more dynamic, comprehensive, and flexible model that allows both for a feedback mechanism and for customization, acknowledging that new businesses demand different types of support based on their stage of development and that of the industry in which they operate.

This report starts with a brief introduction that explains the importance of entrepreneurship and its potential for driving economic growth. Sections I and II offer a transversal snapshot, an assessment of the Egyptian economy and its entrepreneurial sector and the problems it faces. Sections III, IV, and V present three levels of recommendations, from the most paradigm altering to the most punctual.

Section I discusses Egypt’s economic and entrepreneurial fundamentals, seeking to give an overview of the local economy and put it in perspective by making of international comparisons gathered from the most recent surveys. With high levels of unemployment and underemployment, as well as a strong predisposition for private work and below-trend new business creation ratio, Egypt displays both the will and the need for entrepreneurship—which promises to maximize its impact.

Figure 1.

Entrepreneurship and GDP, purchasing power parity (PPP)

Section II begins by looking more particularly at existing initiatives and support organizations. The main handicap of these organizations is the lack of coordination and the duplication in the tasks conducted, which is significantly inefficient and prevents specialization and scalability. Some of the major problems in the Egyptian entrepreneurial environment are identified, including the negative reputation associated with business, the emphasis on “formal” and textual reforms more than their enforcement, weak contract enforcement, and the lack of collaboration in business relationships. Those challenges point to a clear conclusion: there is a great necessity for an actionable plan to support entrepreneurship in Egypt.

This actionable plan is subsequently developed on three levels.

Section III is concerned with the holistic model of entrepreneurship currently at work: a linear process, it is a succession of tasks and of support organizations until the economic venture is on its feet. This model needs to be replaced with a dynamic, self-sustainable model in which cooperative work by individuals with the entrepreneurial, technical, and managerial skills join forces to develop a project that will itself feed back into the pool of qualified persons.

Section IV deals with the strategic actions that have a longterm impact. These include changing the entrepreneurial mindset, prioritizing target sectors, coordinating initiatives, developing an innovation network, and giving more attention to developing management skills and financing opportunities.

Section V develops the third and last level of recommendations and suggests some punctual, focused interventions that could have a potentially large impact; such as the creation of an entrepreneurship advisory board, a ministry for entrepreneurial development, reviewing business-related legislation, integrating incubators into an innovation-education matrix, improving the image of entrepreneurship in the public eye, including entrepreneurship in the elementary and secondary education curricula, revamping schools of commerce in public universities, and supporting the creation of angel funding networks and private venture capital funds.

The future belongs to countries with a solid and dynamic private sector capable of creating jobs, contributing to GDP growth, and generating innovative ideas. But the development of entrepreneurship is seldom automatic or spontaneous. Concerted efforts by all stakeholders in the national economy, led by an enlightened government, are necessary to create the environment and conditions for value creation.

The policies developed in Egypt, in this...