Egypt retains top MEA region spot in 2021 Kearney Global Services Location Index

Daily News Egypt
5 Min Read

Egypt has scored 5.62% to maintain its top spot in the Middle East and Africa (MEA) region, and rank 15th globally, in the latest Kearney report, titled “Global Services Location Index 2021”.

The report, themed “Toward a Global Network of Digital Hubs”, shows that Egypt was the only country in the MEA region to make it to the top 20 countries, with UAE ranking 25th and Turkey 26th.

The GSLI report helps companies decide on the location of their offshore operations, with the Index examining companies’ complex and shifting choices through an analysis of more than 60 countries.

The index analyses 47 metrics across four main categories. The relative weights of each metric are based on their importance to the location decision that is derived from client experience and industry surveys. The four categories are: financial attractiveness (35%); people skills and availability (25%); business environment (25%); and digital resonance (15%).

It noted that Egypt is considered a unique location due to its attractiveness financially, offering competitive compensation and infrastructure costs, and highlighted the country’s progress in developing the information and communications technology (ICT) sector.

The Egyptian Government is ramping up its “Digital Egypt” initiative, which has yielded such gains as an Ericsson digital hub in Cairo to produce cognitive software for global markets, the report cited. 

Amr Mahfouz, CEO of the Information Technology Industry Development Agency (ITDA), said, “We are very excited to maintain our leading position in the global business services arena both regionally and globally and surely adds a further impetus to Egypt as an IT export destination.”

“Egypt has been hailed as an attractive offshoring destination for the multiple competitive advantages it offers and the resilient performance of the IT sector,” he added, “The offshoring industry’s response to the novel coronavirus (COVID-19) pandemic was seamless owing to business continuity measures enabled by strong ICT infrastructure.”

In addition, the index put Egypt before some European services locations such as Germany, Portugal, and Bulgaria, yet still competing against Poland (14th), Colombia (13th), and Estonia (12th). The index indicated that India, China, and Malaysia continue to rank as the top three countries globally.

Egypt’s performance in the four categories of the report saw it achieve 2.75 for Financial Attractiveness. Close to Egypt in this category are: India (2.83); the Philippines (2.82); and Indonesia (2.78).

Meanwhile, Egypt scored 1.05 for People Skills, close to Indonesia (1.26), the Philippines (1.32), Turkey (1.41), and India (2.18).

It also scored 1.15 for Business Environment, close to the Philippines (1.15), India (1.17), and Kenya (1.29).

For Digital Resonance, Egypt scored 0.67, similar or close to Mexico (0.67), the Philippines (0.67), Vietnam (0.68), and Brazil (0.68).

Egypt continues to improve in ICT rankings, and the resilience of its ICT infrastructure has provided a boost to the offshoring industry. The country offers a financially attractive multilingual talent proposition, enabling service providers to serve the Europe, Middle East and Africa (EMEA) region from a single offshoring destination.

The authors of the GSLI report predict a futuristic outlook, where cost competitiveness will not constitute a priority factor for choosing/favouring a BPO location. However, digital resonance will represent a key priority for business leaders and decision-makers.

Accordingly, the 2021 Index introduced the “digital resonance” metric that grades countries based on the digital skills in the market, digital outputs, the amount of corporate activity, legal protections of intellectual property.

The report has furtherly highlighted the shift towards favouring work from home (WFH) capabilities, and highly adaptable business models, which increased the demand for digital skills.

The 60 countries in the 2021 GSLI were selected based on corporate input, current remote services activity, and government initiatives to promote the sector. The metrics used to evaluate location attractiveness were determined from responses to Kearney surveys, other industry questionnaires, and knowledge obtained in client engagements over the past five years.

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