CAIRO: Ahmed Hindawi is an entrepreneur who, besides consistently growing his business, managed to become a pioneer in his field on the world stage — twice. First, curiosity and drive led him to co-found, with his wife Nagwa Abdel-Mottaleb, Hindawi Publishing, which specializes in the academic publishing of scientific journals. Later on, his innovation and adaptability led him to shift the company's business strategy to open access publishing, putting his company at the vanguard of a now emergent trend. Founded in 1997, Hindawi Publishing Corporation now has a portfolio of 277 scholarly journals including renowned names such as the Journal of Biomedicine and Biotechnology and the journal of Mathematical Problems in Engineering. As one of the largest open access publishers worldwide, the company is leading the academic publishing field globally to slowly adopt the model of unrestricted online access to scholarly works. In a recent case study in Learned Publishing on open access publishers in 2009, Hindawi ranked first out of 22 publishers around the world in terms of competitive pricing. “We are growing at an amazing pace of 40 percent of increased published content in terms of numbers of articles,” Hindawi told Daily News Egypt in an exclusive interview. While doing his doctorate studies in physics in the United States, Hindawi noticed the high subscription prices to the academic journals available at the time. “It got me thinking about the impact the internet, which was just starting up at the time, would have on the academic publishing industries,” he said. According to Hindawi, academic research produces 2 million articles with revenues of $8 billion a year. “At that time I was doing my PhD, the yearly subscription for Nuclear Physics, a magazine related to my field of study, cost $18,000, so I recognized how much money was in the industry,” he said. “At that same time, we also realized that there is business opportunity for publishing in Egypt because publishing is labor-intensive, and the most important cost in publishing is the cost of staff required to run a publishing company, not machines or materials,” he added. Egypt has a significant competitive advantage in labor, he said, with 300,000 graduates a year, many of whom can do the same jobs as their counterparts in western publishing companies at a much lower costs. “When starting up the company in 1997, my wife and I had the advantage of not having to buy significantly expensive technologies or software and depended on the basic software and machines required,” he said. Starting with some projects in outsourcing publishing services — taking advantage of the lower cost base — including copyediting, typesetting, xml markups and digitization, Hindawi found out that this was not really strategic and only brought in around $70,000-80,000 a year, which was too low given the ambitions of the company. “The revenue was fine and enough to make a profit, but was difficult to scale and grow substantially,” Hindawi said. This also included a larger scale digitization project for the Society for Industrial and Applied Mathematics for $400,000. When the company started publishing academic magazines in 1999, it was not competing with Egyptian or Arab publishing companies, but with established publishers worldwide. According to Hindawi, one of the interesting advantages of “starting from scratch” in a country with no previous experience in the area, was that nobody told them how to run the business, causing them to adapt and learn as the needs required. The company was more efficient and productive because of this, he said. The 360 employees, who are mostly aged between 20-30, have become more effective than their foreign counterparts. Hindawi said that 2 million articles are published yearly by 110,000 workers in the industry, giving a ration of 18 articles per worker; whereas Hindawi Publishing produces 8,000-9,000 articles so the ratio is closer to 30. “Recent studies have shown that our productivity is around 70 percent higher,” he said, adding that coupled with lower labor costs, this has made the company “extremely competitive.” Since Hindawi Publishing is considered an exporter, it is allowed to operate in the Free Zone Area in Nasr City, which further benefits the company by exempting them from taxes. “We only pay 1 percent of our revenue as a fee to operate here. Nobody can ask more from a government,” he said, also crediting the government's progress in the infrastructure in terms of connectivity and technology. Talking about his switch to open access publishing, Hindawi explained that he began realizing that funders supplying the industry with $1 trillion a year spend a significant part of this on research. These companies, he found, prioritize the exposure of their work through citations and recognition over revenue generated from selling the research itself. Open access publishing allowed his company to publish thousands of articles while requiring a nominal fee from the research institutions and no fees at all from the end-users, increasing the numbers of people accessing the research. He also noticed that quality of editing, display and ease of access were becoming increasingly important, Hindawi took advantage of economies of scale as research funders were more satisfied paying minimal fees, only 1 percent of total research funds, while insuring their research was freely available to everyone, maximizing the impact of the research. “We are in the middle of a number of changes to further simplify and rationalize our business practices to insure higher levels of scalability and to position the company for increasing the number of articles we publish from about 8,000 to much higher levels. We see no limits for growth at this moment, no ceiling, and that's very exciting,” he concluded. This article is part of a series on promising entrepreneurs published in Daily News Egypt in collaboration with Endeavor Egypt. Endeavor is an international non-profit organization promoting high impact entrepreneurship in emerging countries as the leading force for sustainable economic development.
