CAIRO: The Ministry of Communications and Information Technology is shooting for an offshore services revenue target of $1.1 billion by 2010, said Hazem Abdel Azim, senior advisor to the Minister for the technology development sector. In 2005, Egypt ranked 12th among countries seeking to become an offshore location, according to A.T Kearney s Offshore Location Attraction Index, thus becoming the offshore business hub in the Middle East. The index ranks countries according to their financial structure, people skills and economic environment. Speaking at an IT forum held at the American University in Cairo, Abdel Azim said, "While Egypt s score in financial structure was as high as India's, the top ranking country in the index, it scored very low on people skills and business environment. One of the ministry's key strategies to reach this ambitious target and put Egypt on the world's IT map is the expansion of its venture capital programs, Abdel Azim added. "We believe that venture capital is the best vehicle to boost IT investments and the entire economy, he added. In this context, the ministry is increasing the budget for its "technological development fund - a venture capital program run by the ministry to nurture IT start-ups until they become sizable and competent companies - from $10 million to $50 million. A private-public partnership with investments from Telecom Egypt, banks and insurance firms, the fund currently has a portfolio comprising of 10 companies, which Abdel Azim says are not enough. "Every year, the ministry runs business competitions for the most innovative IT business ideas, Abdel Azim said. "Out of the 300 applications we receive annually, only a few are incubated by the Smart Village after intensive screening, training and consultation. "We are still suffering from the general lack of confidence in any governmental project, Abdel Azim explained. "A lot of people believe that the government doesn't deliver on its promises. However, this is changing with time and the number of applicants for the ministry's business plan competitions is increasing every year, he added. So far, the project has been implemented only in Cairo as there is no such thing as the Smart Village in other governorates, he said, but we are now looking into establishing similar incubation centers in all universities to expand these projects into Alexandria, Assiut, Mansoura and others. Despite the relative success of these start-up incubation projects thus far, Abdel Azim admitted that when it comes to the IT industry, size does matter. "It is difficult for start-ups to penetrate automotive and oil and gas businesses with their limited capacity, he said. "This is why we are constantly trying to build the capacity of start-ups, as well as small- and medium-sized enterprises. Human resource development comes as a top priority in the ministry's capacity building agenda, Abdel Azim added. "We still have a big gap between what our university graduates can offer and what the market needs. "A recent survey showed that our university graduates have a serious deficiency in business skills, particularly in marketing and consultancy, he explained, "we still need professionals on the technical side, but we also need a lot more entrepreneurs.
