Analysis by Ahmed Kamel
gypt hasclimbed 10 places to rank 72ndon the Global Knowledge Index (GKI) in 2019 thanks to efforts taken by the political leadership to upgrade pre-university education, technical and vocational education and training, higher education, research, development and innovation, information and communications technology.
The GKI is a joint initiative between the United Nations Development Program (UNDP) and the Mohammed Bin Rashid Al Maktoum Knowledge Foundation (MBRF).
As the role of the state and the public sector diminishes worldwide, growing engagement of the private sector in social community services should bridge the gap. There’s a need to boost ‘knowledge economy’ in Egypt to pave the way for sustained growth in the coming decades.
The knowledge economy is a new concept in modern economics based on growing role of knowledge in production. Knowledge has become a factor in production, in addition to land, capital labor and organization.
The knowledge economy fosters bigger role of small and medium-sized enterprises (SMEs), entrepreneurship, decentralization, corporate governance and eco-friendly businesses.
“One of the features of the transition from the 20th to the 21st century has been the emergence of the knowledge economy, which has significant implications for the importance of new and small firms in innovation and how they innovate,”an OECD study said.
The government is tipped to promote entrepreneurial culture and replace a deep-rooted conception of public employment with free enterprise mindset, especially among the young people.
The World Bank underscores entrepreneurship education as an effective mechanism to promote the culture of free enterprises. The entrepreneurship education equips youth “to be innovative and to identify, create, initiate and successfully manage personal, community, business and work opportunities, including working for themselves, a World Bank study said.
The entrepreneurial culture will in time boost the free enterprise and private business away from working for the government. There are more than seven million civil servants employed by the nation’s administrative authorities.
The culture of private business should be part of the educational system to increase employability. The World Bank deems promoting an entrepreneurial culture as one of the most essential and neglected components of entrepreneurship development.
Egypt can do without roughly six million of that army of civil servants, analysts say, citing the need to find unorthodox solutions to disguised unemployment and ease pressures on the state budget.
Education and training should be planned in line with the needs of the labor market and development requirements. From a microeconomic perspective, training is a must to sustain corporate growth in the long run.
From a macroeconomic angle, training is based on the nation’s educational polices, which are streamlined according to the collective socioeconomic mainstream.
“Entrepreneurship skills are needed to start successful firms, they are not well understood or supported. They may be imparted through school education, universities and vocational training colleges,” the aforementioned OECD study said.
Egypt has taken a raft of measures to improve the business climate in a bid to lure more inflows of foreign direct investment (FDI). A well-designed business climate should be advantageous for all, i.e. the government, the investors, the financial sector, banking and society as a whole.
The parliament last year passed new investment and industrial licensing laws, which are deemed as milestone steps for improving the business climate.
Seeking administrative decentralization, the new licensing and investment laws facilitate incorporation procedures, where official delegates offer investors an all-in-one service, including licensing, registration and property allocation procedures.
A business-friendly climate will also enable young entrepreneurs have easy access to finance, which plays an essential role in sustainable development.
The knowledge economy along with access to efficient funding mechanism will drive growth as happened in a number of emerging markets, i.e. China, Singapore, India, Brazil and Malaysia.