‘Industrial clusters’ to beef up Egypt’s economic growth

A RECENT report by the Planning and Economic Development Ministry has indicated an orientation to establish integrated and collaborative ‘industrial clusters’ to operate in some fields of production. It’s a new concept that comes in harmony with the state’s overall policy of modernising all components of the national economy and continually invigorating the entire process of economic development. In contemporary literature on economic development, industrial clusters are considered a model of choice for the optimisation of production and associated services, given the model’s capacity to speed up both pre-production and post-production arrangements. In the pre-production stage, industrial clusters provide faster means of acquiring resources and components. And in the post-production stage, the cluster model ensures equally faster logistics and more efficient means of product delivery and distribution. In its recent report, the Planning Ministry made special reference to the spinning and weaving industry and woodworks as two fields where industrial clusters would be introduced under the 2021/2022 plan for industrial development. Given the country’s large manufacturing base and established expertise in both industries, the introduction of the cluster model would further enable these industries to promote more efficient access to larger marketing opportunities at home and abroad, taking advantage of the proximity of the sources of production requirements and the availability of logistics close by.

One more advantage of establishing industrial clusters is their potential to increase and diversify the local component’s share in the entire manufacturing base – in itself one of the areas of priority in the ongoing state drive to realise economic comprehensive and sustainable economic development. And there additionally are expectations that the provision of digital services to the industrial clusters would bolster the capacity of the manufacturers operating in the clusters to optimise cost-effect assessment, in addition to widening the scope of digital transformation. In this regard, the Planning Ministry indicated in its report that developing the market digital platform would simultaneously help manufacturers better define their marketing and distribution opportunities and would also facilitate the provision of technology solutions to small and medium-sized companies, certainly lessening the cost and time of having to seek such solutions away from the portal. Complementing this portal is the planned launch of a unified network for entrepreneurship to serve as a shared forum for the presentation and consideration of initiatives forwarded by entrepreneurs.

Again, small and medium-sized industries stand to benefit from the availability of such a forum, consequently enhancing their potentials and prospects for growth in parallel with the state’s targeted expansion of big and heavy industries. Explaining the attention that the state is currently paying to the modernisation and beefing up of the industrial sector, including through developing such new models as the industrial clusters, Planning Minister Dr Hala al-Saeed has noted that the industrial sector generates some 17 per cent of the Gross National Product and absorbs nearly 15 per cent of the country’s regular workforce; hence the worthiness of bolstering the material and technological resources deemed necessary for this sector to remain on a growth course.