By Hamed Mahmoud
Egypt has been ranked 15thglobally in the latest Kearney report; “Global Services Location Index 2021”. The country has recorded 5.62% in the index, retaining its top spot in the Middle East and Africa region.
The report themed “Toward a Global Network of Digital Hubs” shows that Egypt was the only country in Middle East & Africa 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, as the Index examines companies’ complex and shifting choices through an analysis of more than 60 countries.
The index analyzes 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%).
The global index noted that Egypt is considered a unique location due to its attractiveness financially, offering competitive compensation and infrastructure costs. The report also highlighted Egypt’s progress in developing the 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’re 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 attractiveoffshoring destination for the multiple competitive advantagesit offers andthe resilient performance of the IT sector. The offshoring industry’s response to COVID-19 pandemic was seamless owing tobusiness continuity measures enabled by strong ICT infrastructure.”, Mahfouz added.
In addition, the index putEgyptbefore some European services locations like 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 3 countries globally.
Egypt’s performance in the four aforementioned categories of the report:
- Egypt’s Financial Attractiveness(2.75) – close to Egypt in this category are – India (2.83) Philippines (2.82), Indonesia (2.78)
- People Skills (1.05), Indonesia (1.26), Philippines (1.32), Turkey (1.41), India (2.18)
- Business Environment(1.15) – Philippines (1.15), India (1.17), Kenya (1.29)
- Digital Resonance(0.67) – Mexico (0.67), Philippines (0.67), Vietnam (0.68), Brazil (0.68)
Egypt continues to improve in ICT rankings and the resilience of its ICT infrastructure has provided a boost to the off shoring industry. The country offers a financially attractive multilingual talent proposition, enabling service providers to serve EMEA from a single off shoring destination.
The authors of the GSLI report predict a futuristic outlook where cost competitiveness will not constitute a priority factor for choosing/favoring 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 favoring WFH 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.