Cairo tops regional outsourcing cities

Theodore May
4 Min Read

CAIRO: For a country where unemployment is traditionally among the top domestic concerns, Egypt got a new shot in the arm this week as a report ranked Cairo as the seventh best city for outsourcing.

The survey was conducted by Global Services and Tholons and is called the “Top 50 Emerging Outsourcing Cities.

While Cairo ranked number seven, Alexandria made its first appearance in the rankings.

The report cited a multi-lingual work force, business analytics and testing services as among the reasons Cairo earned itself a spot in the top 10.

Among the sectors that have proven a strong base for outsourcing, the IT sector is among those at the top.

With increased competition among service providers offering similar services, distinction has become difficult to achieve, placing a greater emphasis on location. Businesses are not only looking for cost-effectiveness but are also seeking a location which offers a strong, multi-talented workforce, said Hazem Abdelazim, head of the Information Technology Development Industry Agency (ITIDA), in a release.

Cairo’s ranking at number seven makes it the most highly ranked city in the Middle East and North Africa.

The IT sector has been rapidly growing in Egypt, with projects like the Smart Village helping give Egypt a name for itself.

The growth of the IT sector and increased outsourcing to Egypt may help solve one of its great employment challenges. Although a new robust class of young educated professionals has emerged, the problem is that the job market hasn’t evolved to account for this new educated class of laborers.

As a result, many educated graduates have been obliged to work beneath where their education level would suggest they might.

The growth of outsourcing primarily stands to benefit this class of educated youths. Many outsourcing jobs require strong foreign language skills and some degree of technical know-how.

Fougutha Singh Gupta, who co-authored the report, told The Media Line that one of Egypt’s great advantages is its geographic proximity to Europe. The similar time zones allow the Arab world’s most populous nation to share much of the same work hours with Western Europe.

Robust trade agreements and competitive deals to lure investment to Egypt have also fueled the growth of outsourcing here.

“Cairo has progressed a lot in the way they have promoted the industry and attracted investment, Gupta told The Media Line. “That’s the reason Egypt is one of the great emerging markets and since Cairo has now started to see some kind of maturity in labor pools, Alexandria is coming up.

Global Services’ report is hardly the first time Egypt has been heralded as a strong country for outsourcing.

In December of 2008, the research group Gartner issued a report of the top 30 outsourcing destinations. Egypt was among those on the list, though Gartner declined to rank the 30.

BusinessWeek took Gartner’s list and ratings and assigned rankings, putting Egypt at a tie for 20th.

According to Gartner, Egypt’s language, government support, infrastructure, education system, cost and cultural compatibility were all “good. Labor pool, political and economic environment, global and legal maturity, and data and intellectual property security and privacy were all listed as “fair.

Cairo’s Smart Village may be the best example of Egypt’s strength in the outsourcing market. To date, the IT community hosts 35,000 employees. Smart Villages in Cairo and Alexandria, though, have plans to grow in order to accommodate 100,000 workers.

The Smart Village expansion may be the strongest evidence of where Egypt’s outsourcing future is heading.

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