Egypt signs $10 mln deal with Google

Daily News Egypt
4 Min Read

CAIRO: Egypt signed a $10 million deal with Google to support domestic business and workforce development, a step forward in the government’s attempt to spur the nation’s budding IT industry.

The Ministry of Communications and Information Technology (MCIT) sought the internet giant’s support to provide an advertising platform for Egyptian products and services. As part of the deal, Google must invest 25 percent of payment back into the Egyptian economy.

The deal was announced on the tail end of MCIT Minister Tarek Kamel’s visit to the United States last week, during which he forecast that Egypt’s information technology and information technology enabled service exports to the US would increase to $1.1 billion by 2010.

Egypt’s information technology sector continues to grow, spurred by an overwhelmingly young population and an underdeveloped industry that has left room for plenty of expansion.

Total IT spending is expected to increase from $1.2 billion in 2008 to $1.9 billion by 2013 despite the global economic troubles that have reduced previous forecasts, according to a recent Business Monitor International report on the state of the Egyptian industry.

In a nation lagging behind in technological pervasiveness – only around 10 percent of 400,000 medium or large-sized companies have computers, according to one recent survey – computer penetration is expected to nearly double to 17 percent by 2013.

Despite a recent fall in sales, BMI projects a computer hardware industry worth $1.2 billion by 2013. Local desktop producers serve a major percentage of the growing industry, with Egyptian companies such as Centra, Metra and Prosilab all occupying top-five places in the desktop market.

But Egypt’s growth has been dependant on cooperation with the international community.

With low costs and an accessible educated workforce, Egypt has emerged as a major destination for global outsourcing. It ranked sixth in AT Kearney’s 2009 Global Services Location Index, and first in the region.

Local indirect investment has also witnessed a recent spur in activity. Most notably, Google has made inroads into the Egyptian industry, led by the recent $10 million agreement.

Google also announced last week the winners of the Knol competition among several Egyptian universities, intended to encourage Arabic language submissions to the company’s information sharing website.

Various international corporations including Intel, Oracle, Cisco and IBM have also made recent large scale investments in the country, opening support centers serving Egypt and the international community.

IBM opened Egypt’s first Nanotechnology Research Center last week in collaboration with Egypt’s Information Technology Industry Development Agency.

The Egyptian government has taken an active role in supporting the underdeveloped industry. Tax and customs reforms – including halving the maximum corporate tax rate – have sought to encourage foreign investment, while the government has directly supported technological infrastructure, bandwidth capabilities and educational and telecommunications projects.

In August 2008, the ministry extended the “Computer for Every Home initiative nationwide, offering low-cost computers in collaboration with private companies.

Egypt has similarly taken successful strides to reduce piracy, and was named the top reformer in 2007 by the World Bank.

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