May 17
Why the Innovation Ecosystem is Crucial for Businesses and Startups

Introduction: What is an Innovation Ecosystem?


"It takes a village to raise a child, and it takes an ecosystem to scale an innovation."

An innovation ecosystem refers to a loosely interconnected network of companies and other entities that co-evolve capabilities around a shared set of technologies, knowledge, or skills, and work cooperatively and competitively to develop new products and services (Moore, 1993).

Innovation ecosystems are networks of people and organizations that help create and commercialize new products and services. Most times, these ecosystems encourage collaboration between different stakeholders in order to improve the chances of success. While we can find innovation ecosystems in a variety of industries, they are important in fields like technology and pharmaceuticals, where new products and services are often required to stay competitive.

Check out the Business Environment in Egypt!

Another definition of an innovation ecosystem is a network of organizations and individuals that supports the development of new ideas. It includes companies that develop products or services, universities that teach innovation, government agencies that promote innovation, and non-profit organizations that support entrepreneurship. The goal of an innovation ecosystem is to help companies and universities develop new products or services faster and more efficiently.

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The entrepreneurial ecosystem refers to all different players necessary for a startup to flourish in the modern economy. Players include not only research and development (R&D), but also marketing, sales, and operations. In order for companies to be successful, they need to work closely with their partners in the ecosystem, as well as find new ones.

Egypt has a fast-growing tech ecosystem for businesses and startups to make headway.

Why such ecosystems are vital?


Boosting tech innovation ecosystems in cities not just expand the number of tech startups but also give rise to new employment and economic upswing. This is through the creation of new businesses/ventures and job categories. [source: discussion paper by the World Bank]

Innovation ecosystems are important because they allow for ideas exchange and collaboration of different individuals and organizations. This can lead to the development of new products, services, or processes. An innovation ecosystem typically comprises of three major components: (a) Individuals or organizations that generate new ideas, (b) Organizations that develop and commercialize those new ideas, and (c) Organizations that provide support services to both groups.

The individual or organization that generates a new idea is typically called an inventor. Inventors can be individuals or teams, and can come from any sector or industry. The organization that develops and commercializes a new idea is called a venture capitalist. VCs are typically private equity firms or investment banks that fund start-ups for a percentage of ownership in the company.

See a list of Top Venture Capital Firms (VCs) in Egypt 2022


Components of an Innovation Ecosystem


What components are necessary for a thriving innovation ecosystem?


Innovation ecosystems contain economic forces and connections, along with non-economic ingredients as organizations, technology, culture, and sociological interactions; components that promote ideation, innovation and diffusion of such creations. An innovation ecosystem is key to a thriving economy. Components of an innovation ecosystem include:

1. A strong research infrastructure with leading universities and research institutes.


In order for an innovation environment to be prosperous, it needs a strong university system. A system that should be able to conduct research and offer a creative ecosystem. Universities should also collaborate with the local businesses and government to help the ecosystem grow. There have been lately many conversations about the importance of having a strong university system for a city to bring entrepreneurial success.

ITIDA unlocks research potential in local universities and tech institutes through its Collaborative Funded Projects (CFPs). Here is a list of CFPs, an IT Academia Collaboration program which finances 3 categories of CFPs: product development projects (PDP), advanced research projects (ARP) and preliminary research projects (PRP).

The Ministry of Communications and Information Technology (MCIT) in Egypt established a non-profit ICT-related university named Egypt University of Informatics [EUI], located at the Knowledge City in the New Administrative Capital.

2. A robust venture capital community that provides funding for early-stage companies.


A major piece in a blooming innovation ecosystem is a robust venture capital community. This community provides the funding necessary for early-stage companies [i.e. startups] to get their businesses off the ground. Venture capitalists that make up this community are always on the lookout for the next big thing, and they are willing to take risks to bolster innovative startups.

VC community is something that Egypt has in abundance as the country was recently ranked first in number of deals closed in Africa in 2021, and placed third in terms of total funding, where local startups attracted 18% of the total capital deployed across the continent. This is due, in part, to the presence of several top-tier universities in the country, churning out talented entrepreneurs. Additionally, Egypt has a strong tech sector, making it an attractive destination for venture capitalists to invest money.

The presence of a robust venture capital community is important for multiple reasons. VCs help to drive innovation and create jobs. They also help to mentor and support these young companies as they get off the ground. In addition, venture capitalists are often instrumental in bringing new technologies and products to market.

Download MAGNiTT free report here and learn more about Egypt VCs

3. A skilled workforce with the engineering and scientific expertise to develop new technologies.


In order for a country to maintain its status as a global leader in innovation, it is important that it has a skilled workforce with engineering and scientific expertise to develop new technologies. Development of new technologies is key to sustaining economic growth and creating job opportunities. A strong innovation ecosystem is essential for promoting innovation and developing new technologies.

Egypt is a leader in innovation with the largest and youngest multilingual talent pool in the Middle East and second largest in the EMEA region. Visit Egypt's Talent Landscape to learn more about its culture diversity and global competence.

Every country wants to be ahead of the innovation/entrepreneurial competition. It is necessary to invest in a skilled workforce and provide an environment that promotes innovation. Empowering education and offering training programs help workers acquire the skills they need to develop new technologies. Investment is largely needed in the research and development infrastructure.

4. A culture of risk-taking and entrepreneurship that encourages innovation and creativity.


Egypt has a culture of risk-taking and entrepreneurship that encourages innovation and creativity. This is evident by the number of deals that hit a record high in Egypt in 2021. As per MAGNITT 2021 Egypt Venture Investment Report, VC in Egypt continued to climb for the fourth consecutive year, having grown at a CAGR of 117% between 2017 and 2021. The number of VC deals observed a 26% YoY increase since 2020 to reach a record-high of 147 transactions in 2021. Egypt ranked first by deals across Africa and second across MENA.

Digital innovation hubs are spread now more than ever in Egypt. CREATIVA Innovation Hubs, powered by TIEC of ITIDA, provide limitless potential for students, SMEs, entrepreneurs and start-ups to be key actors in delivering digital transformation within all industry sectors.

5. Connections to global markets that allow companies to commercialize their innovations abroad.


In order for companies to commercialize their innovations abroad, they need to have a strong innovation ecosystem and be part of an entrepreneurship-friendly environment. This means that there needs to be a variety of resources available to entrepreneurs, including access to funding, mentorship, and networking opportunities.

Egypt has been an attractive destination for foreign investors for many years. This is largely due to the country's considerable investment in creating a strong innovation ecosystem. There are a number of startup accelerators and incubators in major cities like Cairo and Alexandria, and these institutions provide valuable resources to entrepreneurs.

Get more information about the Technology Innovation and Entrepreneurship Center (d.b.a. TIEC)'s StartIT Incubation Program

6. Supportive government policies and regulations.


Government policies play a key role in fostering the emergence and growth of an entrepreneurial ecosystem; i.e. an environment conceptualization in which the right elements combinations help to nurture economic growth via innovation and enterprise. One element declares the legislative framework [regulation] wherein such entrepreneurial activity can happen.

Some key policies that can help include providing tax breaks or other incentives for startups and small businesses, simplifying the regulatory process, and investing in education and training programs that support innovation and entrepreneurship.

Governments also need to create an environment that is conducive to risk-taking, which is essential for innovation. This can be done by establishing laws and regulations that are clear and predictable, encouraging collaboration between companies and entrepreneurs, and promoting a culture of creativity and risk-taking.

Read: New Policy Actions Triggered by ITIDA to Boost Startup Ecosystem and Facilitate VC Investments in Egypt

Egypt's government always seeks so as to break the barriers facing start-ups and entrepreneurs.
GoE also aims cut spending and provide facilitations for these companies.

In this context, President El-Sisi recently gave the following directives for the Egyptian Ministry of Communications and Information Technology:

  • Establishing companies through digital notification via a dedicated platform
  • Allowing opening virtual companies without being bound by having a physical headquarters
  • Easing requirements to establish one-person companies
  • Establishing more free investment tech zones and offering tax exemptions for start-ups
  • Activating whitelists to import electronic components for specialized companies

 

Conclusion

In conclusion, the innovation ecosystem is key to the success of any company or organization. By creating a supportive environment that encourages creativity and risk-taking, businesses can foster an innovative culture that will drive them forward. By understanding the different elements of the ecosystem and how they interact with each other, businesses can create a system that is conducive to innovation and growth. Finally, in order to succeed in today's competitive market, it is essential to have a strong innovation ecosystem in place.


Apr 06
The Easiest Steps to Starting Your Own Business

Businesses come in all shapes and sizes. Whether you are starting a small business from the ground up or you're looking to take an existing business to the next level, there are a few key things to keep in mind. First, make sure you have a clear idea of what you want your business to accomplish. Second, find the right tools and resources to help you achieve your goals.

Starting a business is a daunting task, but with the right tools and advice, it can be done successfully. There are a number of things you'll need to get started, from a business license to marketing materials. Here are some tips for setting up your business.

1. Conduct Marketing Research

Conducting market research is the process of collecting data on the preferences and behavior of consumers in order to better understand their needs and interests. By understanding these factors, businesses can develop products and services that meet the needs of their target market.

Market research can be done through a variety of methods, including interviews, focus groups, surveys, and consumer observation. It is important to select the method that will give the most accurate information, as each method has its own set of limitations.

Browse some success stories from Egyptian startups graduated from TIEC programs.

2. Write your Business Plan

Writing a business plan is an essential step in starting or expanding any business. It can help you identify your goals, develop strategies to achieve them, and assess the financial feasibility of your plans. A well-crafted business plan can also help secure investor backing, attract talented employees, and improve your chances of success.

Creating a business plan can be unnerving, but with the right tools and guidance, it can be a relatively painless process.

Download Technology Innovation & Entrepreneurship Center's free Business Plan Template to use.

3. Fund your Business

There are many ways to fund your business. One option is to borrow money from a bank or other financial institution. Another option is to raise money through an equity or debt offering. In addition, you can also receive grants or other forms of financial assistance from government or non-profit organizations. Whatever route you choose, remember to be smart about it and make sure you have a solid business plan in place to ensure your venture succeeds.

Examples of startup funding entities in Egypt include Cairo Angels, Flat6labs, KI Angels, Sawari Ventures, and Endure Capital.

Take a look at ITAC's Collaborative Funded Projects (CFPs). They can also be a great resource of inspiration.

Contact TIEC, of ITIDA, for more information about StartIT Incubation Program, call +202.3534.5734, or send them an email inquiries@tiec.gov.eg 

4. Pick your Business Location

There are many factors to consider when picking your business location, but some of the most important considerations include: access to customers, available resources, cost of living, and infrastructure. When selecting a location for your business, it's important to take all of these factors into account so you can make the best decision for your company.

If you cannot afford or find a place to start your business, don't worry!

Check TIEC Co-Working Space or get further details about CREATIVA Innovation Hubs

5. Choose a Business Name

There are a few things to keep in mind when choosing a business name. First, consider the company's industry. Some industries are more likely to be associated with specific names, like entertainment or technology. Second, think about the name's length and how it will be pronounced. Third, consider the name's potential for trademark infringement. Finally, make sure the name is available before starting your business.

6. Register your Business and Apply for Licenses/Permits

The process of business registration is a requirement in almost all countries. This process can be time-consuming and cumbersome, but it is important for businesses to have the proper paperwork in place in order to avoid any legal issues down the road. With the help of a professional, registering a business can be done quickly and easily.

Contact the Intellectual Property Rights office at ITIDA premises to know how to apply for licenses.

7. Open a Business Bank Account

Opening a business bank account can help your business grow in many ways. It can give you access to a range of financial services that can help you manage your money, track your expenses, and keep better records of your business dealings. Additionally, having a bank account can make it easier for you to receive loans and other forms of financing. When opening a business bank account, be sure to ask about the available benefits and restrictions.

In conclusion, starting your own business can be challenging, but with adequate planning and execution it can be highly rewarding. By following the steps outlined in this article, you will be well on your way to starting a successful business.

Get in touch with ITIDA now to reap the benefits of startups support. Call us at 16248 (Sun – Thu from 9AM to 5PM).


Sep 21
EgyptInnovate Wins ITU Innovation Challenge for Ecosystem Best Practice
The online innovation hub for Egypt, "EgyptInnovate" platform has won the ITU Innovation Challenges 2020, in the "Ecosystem Best Practice Challenge" category.

The platform is part of Egypt's Ministry of Communications and Information Technology (MCIT) innovation support strategy where it's managed by the Information Technology Industry Development Agency (ITIDA) through the Technology Innovation and Entrepreneurship Center (TIEC).

The platform's winning reflects the effective tools it provides for promoting innovation, learning, and availing networking opportunities to innovators and entrepreneurs, through a digital platform supported in both Arabic and English. It also provides an interactive map that embraces the key players in the innovation and entrepreneurship ecosystem in Egypt.

Projects from 26 countries, including Egypt, applied for the competition, where entrepreneurs, innovators, Small and Medium-sized Enterprises (SMEs) owners, policymakers, and ecosystem builders competed.

The ITU Innovation Challenges 2020 is a global open competition platform for innovators and ecosystem builders to present their ideas and projects, empowering them to transform their communities into thriving digital societies. The table below provides the details of the overall challenge timeline.

The competition comprised three categories: Digital Change-maker Challenge, for innovators with ideas that create a digital impact in their communities; Ecosystem Best Practice Challenge, for ecosystem builders with good practices that nurture an enabling environment for innovators in their communities; and Women in Technology Challenge, for individual women tech innovators and eligible startups with digital projects that create impact for women in their communities. 

The overall theme of this year's challenges was "Rethinking the digital economy's value chains during the Covid-19 pandemic." The theme reflects the dire need for the digital transformation, more than ever before, to help global decision-makers and innovators build a digital economy and maintain economic stability for their societies. It also provides an opportunity for innovators and ecosystem builders to present their ideas and projects and enables them to transform their societies into thriving digital ones. 

The challenge winners are qualified to join the virtual ITU Global Innovation Forum, in October, where they will participate in capacity building workshops, pitch their proposals to a global audience of experts, and network with decision-makers.

According to the GSER 2020 report, Cairo provides a perfect testbed for innovation and an attractive market for scalability. Egypt has seen a surge in technology innovation support programs and movements by the public and private entities that triggered an entrepreneurship boom and led startups business to thrive. 

EgyptInnovate platform aims at exposing Egypt's innovators locally and globally, connecting nodes and building collaborative communities of Egypt's innovation and entrepreneurship ecosystem. Besides, it aims at educating innovators, startups, and businesses about technology and innovation management.

The platform was built on open-source software, enabling free access to all its data. The number of registered users on the digital platform this year exceeded 50,000, and the number of registered entities on Egypt Innovation Map reached over 1,000 organizations, agencies, and startups.


Sep 02
ITIDA Collaborates with Eleven Leading Global Associations to Set Clear Vision for Technology and Business Services
The Information Technology Industry Development Agency - ITIDA has participated in the recent regular meeting of Global Technology and Business Services Council (GT&BSC) conducted to follow up on the progress made by its member organizations.

The meeting’s agenda included reviewing the efforts exerted to support and ensure business continuity and to deliver a global response to the challenges and changes brought about by COVID-19, and forming a clear vision for the future of the sector.

GT&BSC, which ITIDA joined last July as a founding member, is an alliance of twelve international associations representing the technology and business services sector across Bulgaria, the Balkans, Czech Republic, Egypt, Germany, Hungary, India, Malaysia, Poland, Romania, Russia, South Africa, Sri Lanka, United Kingdom, United States and Ukraine.

ITIDA’s Acting CEO, Amr Mahfouz said that the sector played a very positive role in lessening the pandemic impact, helping in avoiding service interruption as it enjoys the flexibility and speed response to crises while ensuring the safety of its employees.

Mahfouz underlined that Egypt has invested heavily in developing its ICT infrastructure and digital capabilities where this enabled the services sector to remain resilient and to meet the unprecedented demand and increased reliance on digital services in all areas.

According to a former statement by the council, the technology and business services sector was integral to supporting businesses across the world as they addressed the challenges of adapting to changes caused by COVID-19, demonstrating remarkable agility, commitment and resilience in responding to the crisis; ensuring business continuity for global clients and prioritizing safety of all employees.

The sector was central to the rapid deployment of work from home models and digital transformations, providing critical support and “essential services” to various sectors including governments through highly skilled professionals around the world. This is all referenced in the report being published today entitled: “A unified global response for the technology and business services industry”.

Globally, technology and business services will play a key role in evolving nations to the next normal, driving the global economy out of an inevitable downturn and reducing the impact of future economic and social shocks, transforming businesses quickly and making them more resilient moving forward.

The Council members highlighted “We are all incredibly proud of how well our industry responded to the challenges presented by COVID-19. Partnerships and individuals around the world worked tirelessly to ensure key services were delivered in really adverse conditions, remodelling and reinventing business processes literally overnight.

It is the Council’s firm belief that technology, collaboration and access to a global talent pool will be key to driving business and Governments out of the inevitable downturn. Sharing best practices, thought leadership and collaborating on new operating models on a global stage will accelerate recovery around the world. We are delighted that our entire industry is collaborating in this global way for the first time and believe this will provide significant value to l global governments, our members, their customers and their employees around the world”

The Global Technology and Business Services Council has an ambitious program of work, with immediate next steps including conducting a global body of research to better understand the industry’s global state and prepare a report showing directions of further development.

Founding members of GT&BSC (in alphabetical order)
ABSL, covering Poland, Romania, Czech Republic, Bosnia & Herzegovina (Balkans), Latvia (Baltics)
AIBEST, covering Bulgaria and the Balkans
ASTRA, covering Russia and Belarus
BPESA, South Africa
GSA, United Kingdom
IAOP, United States
ITIDA, Egypt
ITUKRAINE, Ukraine
NASSCOM, India
OM MALAYSIA, Malaysia
SLASSCOM, Sri Lanka


Jun 15
Egypt Selected Among EMEA’s Business Services Locations

Egypt has recently been featured in a report by The Association of Business Service Leaders, ABSL, a leading international non-profit organization that connects global and local companies that set up their global service centers in Central and Eastern European countries.

The report, co-authored by Deloitte, JLL, and Randstad, profiles 18 carefully selected countries and covers the whole spectrum of business services location options in the EMEA region.

The report, titled EMEA’s Business Services Landscape, brings into focus a number of factors that strengthened Egypt’s position as a world-class destination for business services such as its very large, well-educated workforce, and the highly-competitive operating costs it offers.

The report highlights the availability of talent in Egypt as an edge allowing it to set itself apart from other nearshore destinations by offering companies the possibility to implement service centers on a large scale.

“I’m thrilled that Egypt is the only non-European country to be listed in the report, Hala El-Gohary; CEO of The Information Technology Industry Development Agency (ITIDA), said.

The business services sector has recorded strong and consistent growth with high employment rates at a total of 174K people employed. “We have a solid plan in place that guarantees the next wave of growth targeting to reach 225k as total employment by 2022,” commented ITIDA’s CEO.

Egypt has established itself as a prime location for business and IT services for global operations serving 100 countries. The government pro-actively supports the sector, ranging from investments in talent and infrastructure to incentives and support to foreign investors.

The market in Egypt is experiencing a shift in its services portfolios, the report confirmed. The report throws light on the companies’ move from multilingual contact centers to high-value niche services such as product development and R&D.

“We are constantly observing the shared services sector in the EMEA region and are astonished at the pace at which some locations are developing. More and more centers where new investments are being opened increase year by year - this is Egypt in particular”, said ABSL Strategy & Business Development Director, Paweł Panczyj. With more than 100 centers, Cairo is the main location for the industry, but increasingly companies are also locating in Alexandria.”

“Egypt’s key strengths are its very large and educated workforce, which allows the country to set itself apart from other nearshore destinations by offering companies the possibility to implement service centers on a large scale. Access to qualified staff is a key factor in choosing an investment in our sector,” he added.

The report is perceived by its authors as a practical location handbook that gives a fair overview of the leading metrics considered important in the location evaluation process.

“Egypt is one of the next frontier GBS/SSC destinations in EMEA regions. It offers investors both the benefits of lower-cost offshore and convenience of nearshore locations. With a population of one-fifth of EU’s total, young and well-educated workforce it offers good opportunities in Finance and Accounting, IT and other typically outsourced functions.”, commented Vitaliy Lehkyy, Manager, Global Location Strategies at Deloitte.

According to the report, The US and UK account for more than 30 percent of the countries of origin of export-oriented business services centers in Egypt. The report revealed that software development (62%), customer service (29%), and IT helpdesk (24%) are the major types of services delivered by the centers in Egypt.

The report highlights Egypt as a top country in terms of availability or supply of talent pool with accounts payable role, only second to the UK. This emphasizes the potential for Egypt to host Finance shared services centers.

The report intentionally does not seek to profile specific cities or rank the locations in order of attractiveness but covering country snapshots with key macroeconomic indicators, human resources landscapes, payroll costs, and key labor code characteristics.