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This report should be referenced as follows:
Istebdaa' (Yomken. com) and Nesta (2019) Understanding Egypt's innovation system.
Content and research: Tamer Taha, Miral Maarouf, Asmaa Kamel, Mostafa Maghwry, Mohga Koshty, Omar Mostafa, Ahmed Yousry, Ayman Sayed (contributors). Nathan Kably, Florence Engasser (reviewers).
Design: Priscila Vanneuville
Disclaimer: Information and data collected in August 2019.
1. COUNTRY PROFILE
1.1 INTRODUCTION
Despite challenges, Egypt is striving towards the formulation of a comprehensive national innovation system.
In the past decade, Egypt's economy has witnessed significant development in many sectors, notably science, technology and innovation (ST&I).
With a relatively young, tech-savvy population (more than 60 per cent of the population is under the age of 30), a growing economy (5.7 per cent GDP annual growth rate in 2018), a vibrant entrepreneurship scene, and an increasingly proven interest from international corporates in the Egyptian market, as well as different international organisations and donor agencies, the Egyptian innovation and technology ecosystem has seen significant positive development during the past decade. This has been reflected in Egypt's Vision 2030 and in the constitution adopted in 2014.
Accordingly, ST&I is now considered a main pillar in creating a competitive economy and a society based on knowledge and innovation by 2030.[^1]
In line with this vision, relevant governmental entities have designed their own ST&I relevant strategies.
For example, The Ministry of Higher Education and Scientific Research (MoHESR) has adopted its own National ST&I Strategy (ST&I 2030) focusing on two main pillars:
- Creating an enabling and supportive environment for science, technology and innovation.
- Knowledge transfer and localisation of technology to contribute to economic and community development.
The strategy is implemented in coordination with the Academy of Scientific Research & Technology (ASRT).
At the same time, the Ministry of Trade and Industry's (MTI) Industrial Innovation Strategy focuses on promoting an innovation culture, incentivising market-oriented research and development, and building strong links between academia and industry through creating clusters among companies and research institutes, and enabling companies to bring innovations to the market.[^2]
Egypt's Ministry of Communications and Telecommunication Technology has also been working to foster ICT-based innovation through enhancing youth skills and providing much-needed support to young tech entrepreneurs.
Similarly, other ministries and governmental entities, civil society organisations, and business associations are embracing innovation in their activities and operations, even if not directly related to their respective mandates. These include the Ministry of Investment and International Cooperation, the Ministry of Planning, Monitoring and Administrative Reforms, the Central Bank of Egypt, etc.
Such a myriad of initiatives have enriched the national innovation system, but despite such progress in terms of activities and legislation encouraging entrepreneurship, research and development, there are still gaps in the coordination of such activities and a lack of ability to measure their real impact on the economy.
The main core elements of MTI strategy:
1. Stimulating innovation: At this stage stakeholders like the MTI or other ministries actively supporting innovation and competitiveness, besides innovation support entities (e.g. Academy of Scientific Research and Technology (ASRT), Industrial Modernization Center (IMC), Technology Innovation and Entrepreneurship Center (TIEC), technology transfer offices (TTOs) and technology innovation commercialisation offices (TICOs) take coordinating measures to motivate the private sector focus on innovation.
2. Enabling Innovation: This strategy focuses on measures that bring different innovation actors together, as well as facilitating and encouraging networking and collaboration activities, locally and internationally. The MTI's major role is to establish and finance the necessary structures as a dedicated part of an innovation-enabling infrastructure.
3. Facilitating innovation: Mechanisms to support industry and academia to turn those innovative ideas into actual products, processes, services and business models.
4. Commercialising innovation: This strategy includes measures supporting the private sector to get better access to the market in order to commercialise innovations made in Egypt.
| GERD AS % OF GDP (2018) |
GLOBAL INNOVATION INDEX GII (2019) |
GLOBAL COMPETITIVE-NESS INDEX (2019) |
HIGH-TECHNOLOGY EXPORTS (% OF MANUFACTURED EXPORTS) (2018) |
PATENT APPLICATIONS RESIDENTS (2018) |
TIME REQUIRED TO START A BUSINESS (DAYS) (2019) |
| 0.72 |
Rank 92 with score 27.5 |
Rank 93rd with score 54.5 |
0.87 |
997 |
12.5 |
Source: World Economic Forum; World Bank Indicators; UNESCO Institute for Statistics.
Egypt has made recent efforts to improve its science, technology and innovation through the adoption of encouraging legal and economic reforms. Such endeavours have been translated in the gradual improvement of its GII ranking (from 105th place in 2017 to 95th in 2018 and 92nd in 2019). These advancements were mainly fuelled by knowledge creation activities (e.g. scholarly outputs, number of research institutions and the number of patent applications).
However, on the market side, poor diffusion of knowledge is still hindering the spillover effect of such improvements. There are clear gaps in the innovation system. Firstly, the lack of ministerial-level alignment in the ST&I policy causes difficulties in the formation of links among different agents. Such a coordinating role between ministerial strategies was mandated back in 2006 to the Higher Council for Science and Technology, yet the council is no longer active and did not have any binding budgetary decisions. Secondly, there is weak academia-industry collaboration despite the availability of skilled human capital.[^3], [^4] It is, therefore, becoming a national priority to develop innovative policies to enhance the linkage process, notably given the low levels of private R&D spending.[^5]
1.2 STATISTICAL HIGHLIGHTS
Egypt's ranking in the Global Innovation Index is lagging behind other countries with the same level of development.
In the table on the next page, Egypt's performance is compared to that of Jordan (due to a close GII score), Malaysia, Turkey (both considered as newly industrialised economies), and Israel (innovation leader in the Middle East according to the GII score).
Egypt's relative strength relies mainly on its big and dynamic market. The advancements in the ease of doing business and notably the implementation of the investment law and the supportive schemes by the Central Bank to fund SMEs, has considerably facilitated access to credit, in addition to the encouragement of investment from VCs (even if the latter is still considered by many analysts to be relatively low).[^7]
Furthermore, Egypt has a comparatively large workforce employed in knowledge-intensive services[^8] and relatively developed business clusters (e.g. Innovation Cluster Initiative in Alexandria and Assiut). In terms of output, Egypt has a growing GDP per worker (2.5 per cent on average) and due to the digitisation of many activities, computer spending as part of the GDP is relatively high.
Egypt has gradually developed in the gross expenditure allocated to R&D, universities' ranking score (partly thanks to the Egyptian Knowledge Bank initiative[^9] and other recent regulatory reforms), trade competition and market scale and creative goods' exports.
However, weaknesses are observed in the country's capital accumulation and the regulatory environment measure (defined as the ability of the government to formulate effective and well-coordinated policies to promote innovation and private sector development). As a result, the private sector is not engaged enough in R&D, where business expenditure on R&D is below average.
| GII |
EGYPT |
ISRAEL |
JORDAN |
TURKEY |
MALAYSIA |
| Overall GII score |
27.5 |
57.4 |
29.6 |
36.9 |
42.7 |
| Input Sub index score |
33.3 |
63.3 |
37.1 |
45.3 |
52.9 |
| Institutions |
47.9 |
77.9 |
62.1 |
57.4 |
71.6 |
| Human Capital And Research |
19.7 |
54.5 |
29.4 |
36.3 |
44.2 |
| Infrastructure |
36.8 |
56.1 |
38.2 |
52.2 |
51.8 |
| Market Sophistication |
41.0 |
61.4 |
38.9 |
50.8 |
57.8 |
| Business Sophistication |
21.2 |
66.5 |
16.9 |
29.5 |
39.3 |
| Output Sub Index Score |
21.6 |
51.6 |
22.1 |
28.6 |
32.4 |
| Knowledge And Technology Outputs |
22.1 |
56.9 |
17.4 |
23.0 |
32.1 |
| Creative Outputs |
21.1 |
46.3 |
26.8 |
34.2 |
32.8 |
Source: Global innovation index (2019)
1.3 HIGHLIGHTS OF KEY INNOVATION PROGRAMMES
RESEARCH DEVELOPMENT AND INNOVATION PROGRAMME (RDI)
The Ministry of Higher Education and Scientific Research launched this project with a grant of £9m with the collaboration of the European Commission in October 2007. The RDI programme's overall objective was to contribute to enhancing Egypt's economic growth and international competitiveness through improving its research, development and innovation performance. The programme had three specific objectives: 1) Strengthening the link between the research and development (R&D) sector and industry while enhancing the innovation and technology transfer culture, 2) Evaluating the Egyptian Science, Research and Technology Landscape for the Design of the Egyptian Innovation Policy and Strategy, 3) Facilitating Egyptian participation in the European Research Area.
The first objective results were clearly demonstrated through the receipt of more than 700 proposals, of which 51 were granted, in two calls for collaborative projects between enterprises and research institutes/universities from Egypt, in addition to joint research projects with European partners. It is worth mentioning that ten innovation support projects received grants to establish technology transfer units and industry-related offices in universities and research institutes, as well as raise awareness and promote innovation among public and research communities. The Monitoring and Evaluation Component implemented in close collaboration with the Ministry was successful in conducting and analysing extensive surveys on R&D performance, innovation practices of Egyptian enterprises and industry needs. Finally, the programme was considered an important factor in promoting international and cross-border technology transfer.
http://www.crci.sci.eg/wp-content/uploads/2015/06/Evaluation_of_the_Egyptian_Science.pdf
NILEPRENEURS
An initiative that aims to raise young people's entrepreneurship awareness. The initiative was launched in 2017 by Nile University, following a five-year-agreement with the CBE, in collaboration with the Micro, Small, and Medium Enterprises Development Agency (MSMEDA), the Ministry of Planning, the Academy of Scientific Research and Technology, local banks, the Egyptian Banking Institute (EBI) (the educational arm of the CBE), and local and international entities and donors.
The CBE seeks to turn NilePreneurs into a national initiative that adopts international best-practices and progressive scientific methodologies. The initiative provides the necessary technical equipment and engineering consultancy for innovators through the design house located at the Nile University to reach a prototype in accordance with the standard operating procedures for product development. Similar models to the design house are to be established in three other universities.
A cooperation protocol has been signed between NilePreneurs and the Rowad 2030 project, implemented by the Ministry of Planning, Monitoring and Administrative Reform, where the ministry will finance the "Micro Factory” programme for small-sized products ranging from 50 to 100 units, supporting products from the ideation phase to the final stage of development.
http://nu.edu.eg/nilepreneurs-new-initiative-central-bank/
INNOVATION CLUSTER INITIATIVE
The Information Technology Industry Development Agency's 'Technology Innovation and Entrepreneurship Center' (TIEC), launched a network of 'Innovation Clusters' to enable innovation and entrepreneurship through public-private partnership (PPP). Each cluster specialises in a specific, promising ICT-enabled sector creating new job opportunities and providing accumulated experiences.
So far, two clusters have been developed in Borg Al-Arab and New Assiut.
http://ici.eg/
INNOAWARD
The Industrial Innovation award is implemented by the Ministry of Trade and Industry as a measure of its Industrial Innovation Strategy in efforts to stimulate innovation within Egyptian industry. The award is supported by the Egyptian-German Promotion of Small and Medium Enterprises (PSME) project.
The award will give recognition to outstanding innovations developed and implemented by Egyptian companies from all industrial sectors. It seeks to acknowledge innovative companies and their efforts in order to create awareness of innovation and motivate companies to innovate. The award has attracted more than 100 entries from companies in its first round in 2019.
http://www.ebtaker.org/en_us/about-us/
EGYPT KNOWLEDGE AND TECHNOLOGY ALLIANCES (E-KTAS)
E-KTAs is a cluster of partners working across the innovation chain, focusing on the national industrial priority sectors. The initiatives provide grants of up to £500,000 to a consortium of academic and research institutes collaborating with industrial partners and NGOs.
Fifteen alliances have now been formed (ie. the National Desalination Alliance; the National Alliance for Renewable Energy; the Petrochemicals and Pharmaceutical Industry Alliance; the Textile Industry and Space Science Applications Alliance, and others). The alliances have been formed through the participation of 135 companies, 55 universities and research centres, 18 ministries and government agencies and 20 civil society organisations.
The programme focuses on stimulating local manufacturing and the introduction of new technologies, where it has successfully launched 33 manufacturing prototypes including the production of high-quality spare parts to serve power stations, spare parts for Egyptian railway vehicles, and improved non-traditional oil recovery methods.
http://www.asrt.sci.eg/index.php/grants-2/kta
DIGITALISING AGRICULTURAL PRODUCTION
Egypt's Agriculture Ministry, in partnership with the United Nations Food and Agriculture Organisation (FAO), announced a joint project to develop a digital agricultural guiding model as part of the 2018-2020 National framework programme signed by the Egyptian Government.
The ministry announced that it is currently establishing a central information centre containing a full database on food production operations in the country, and forecasting operations for water usage and areas needed for cultivation.
The project also aims to develop a digital map of the country's landscapes to monitor areas of urban expansion and rates of desertification.
A map that monitors animal diseases and facilitates epidemic-control is also being designed, along with a plan to apply an early warning system of trans-boundaries diseases like rift valley fever.
http://www.fao.org/egypt/news/detail-events/en/c/1204523/
DIGITAL PUBLIC SERVICES
The Ministry of ICT, in collaboration with the Ministry of Planning, is leading an initiative for achieving a digital government and digital public services. The ministry is planning to launch around 25 digital public services during the year 2019. These services include notarisation, renewing driving licences, utilities and electricity, municipalities, agriculture and marriage officiants. Successfully implemented digital transformation initiatives to automate governmental agencies include E-Visa, Endowed Asset Management, Farmer's Card, Law Enforcement, Health Insurance, and more.
Unified citizen cards and manufacturing electronics are also projects that the ministry is planning to issue during the upcoming period. Citizens will use this card in all their financial deals and transactions. The main objective of this card is the financial inclusion of 20 million citizens entering the legal system of financial services.
http://www.mcit.gov.eg/Media_Center/Press_Room/Press_Releases/35249
NATIONAL PROGRAMME FOR TECHNOLOGICAL SPECIALISED INCUBATORS (INTILAC)
The Academy of Science, Research and Technology (ASRT) launched the 'INTILAC' programme to bridge the gap between academic researchers, professionals and the business community through supporting the transformation of innovative technological ideas into startup companies by providing the necessary financial, technical and logistical support.
The INTILAC programme is targeting undergraduate and postgraduate students to utilise their graduation projects, early-stage entrepreneurs, and researchers in Universities and Research Centers, providing the accepted applicants with financial support up to 150000 L.E/project in one year.
The programme has launched around 14 business incubators across Egypt's districts in collaboration with public and private universities, non-governmental organisations, and industrial chambers.
http://www.asrt.sci.eg/index.php/grants-2/intilac-incubators
1.4 HISTORICAL TIMELINE OF KEY POLICIES
Reform policy of ST&I system in Egypt
The following is a timeline of key policies and reforms in Egypt's Science, Technology & Innovation (ST&I) system:
- 2007: The reform policy resulted in the restructuring of ST&I infrastructure and devised a model of organisation and funding that puts education and scientific research at the heart of development. The Higher Council for Science and Technology (HCST) and the Science and Technology Development Fund (STDF) were examples of new entities established in this period based on that reform.
- 2014: Ratification of New Constitution setting an annual target for spending on R&D to reach 1% of GDP.
- 2015: Introduction of Egypt Vision 2030 with a core pillar on Knowledge, Innovation & Scientific Research.
- 2016: Development of the 'Industrial Innovation Strategy' and 'Egypt's ICT 2030 Strategy' as a translation for Egypt's Vision 2030 with identified key measures to reach Key Performance Indicators (KPIs) from the MTI and MCIT's side.
- 2018: Formation of 'Incentives for Science and Innovation Law'.
- 2019:
- Establishment of national fund supporting innovators.
- Introduction of the new Law of Financing Science, Technology and Innovation with a new entity responsible for funding ST&I as a substitute to STDF.
- 2020: Issuance of the by-law of the new funding agency responsible for funding ST&I in Egypt.
1.5.1 INSTITUTIONAL MAP OF THE INNOVATION SYSTEM
National System of Science, Technology and Innovation Policy
This institutional map represents the existing organisational structure of the National System of Science, Technology, and Innovation Policy. It illustrates the flow of "Political influence" and "Provides funds" between "Major Institutions". Institutions marked "No longer operating" are also shown.
Legend:
* Political influence: (represented by solid arrows)
* Provides funds: (represented by dashed arrows)
* Major Institutions: (coloured grey boxes)
* No longer operating: (greyed out boxes)
Top Level - Decision Making & Coordination:
* President (Political influence to PM, SCESR)
* PM (Political influence to Ministries' council, MHESR, MTI, MCIT, MIIC, MALR, MPMAR, MWRI, MOF, HCST, MSMEDA, CBE)
* SCESR (Specialized Council for Education and Scientific Research)
* Ministries' council
Coordinating Councils and Institutions (under Ministries' council influence):
* HCST (Higher Council for Science and Technology) - No longer operating
* MSMEDA (Egyptian Micro, Small and Medium Enterprises Development Agency)
* CBE (Central Bank of Egypt)
Ministries (under Ministries' council influence):
* MHESR (Ministry of Higher Education and Scientific Research)
* MTI (Ministry of Trade and Industry)
* MCIT (Ministry of Communication and Information Technology)
* MIIC (Ministry of Investment and International Cooperation)
* MALR (Ministry of Agriculture and Land Reclamation)
* MPMAR (Ministry of Planning, Monitoring and Administrative Reform)
* MWRI (Ministry of Water Resources and Irrigation)
* MOF (Ministry of Finance)
Institutions and Under-Ministries (under relevant Ministry influence, e.g., MHESR influences ASRT, STDF, SCU, SCSRC):
* ASRT (Academy of Scientific Research and Technology) - Receives funds from MHESR, provides funds to TTOs and TICOs, Research centers, Incubators, Startups
* STDF (Science and Technology Development Fund) - Receives funds from MHESR, provides funds to Research centers
* SCU (Supreme Council of Universities)
* SCSRC (Supreme Council of Scientific Research Centers and Institutes)
* SCAZU (Supreme Council of Assiut University)
* SCPUU (Supreme Council of Public Universities)
* SCPRU (Supreme Council of Private Research Universities)
* ICTI (Industrial Council for Technology and Innovation) - under MTI
* IMC (Industrial Modernisation Center) - under MTI, provides funds to SMEs
* IDA (Industrial Development Authority) - under MTI
* TICs (Technology Innovation Centers) - under MTI
* ITIDA (Information Technology Industry Development Agency) - under MCIT
* TIEC (Technology Innovation and Entrepreneurship Center) - under MCIT, provides funds to Incubators, Startups
* Egypt Ventures - under MIIC, provides funds to Startups
* GAFI (General Authority for Investment and Free Zones) - under MIIC, provides funds to Incubators, Startups
* FEI (Federation of Egyptian Industries) - under MIIC
Final Beneficiaries:
* Universities
* Research centers
* TTOs and TICOs (Technology Transfer Offices and Technology Innovation Commercialisation Offices)
* Incubators
* SMEs (Small and Medium Enterprises)
* Startups
* 12 chambers
Key Notes on Institutional Map:
* This institutional map represents the existing organisational structure of the National System of Science, Technology, and Innovation Policy.
* HCST stopped activities in 2011.
* STDF is the main funding scheme for all research disciplines in Egypt. However, the parliament has passed a bill in June 2019 to form a new entity responsible for funding ST&I as a substitute to STDF, and its by-law was issued in 2020.
* ASRT funding is focused on the establishment of innovation clusters and incubators and supporting the nationwide network of TTOs in Egypt.
* Every research institution in Egypt has its own institutional funding for R&D. This institutional funding is mainly supplied by the relevant ministries.
* Industry unions and chambers are important key players in the policy setting.
1.5.2 ROLE AND INFLUENCE DIAGRAM OF KEY MINISTRIES AND AGENCIES
This diagram illustrates the role and influence of key ministries and agencies within Egypt's innovation system, categorized by their primary function: DESIGN, SCIENCE AND TECHNOLOGY, and INNOVATION, and underlying OPERATION. The size of the bubbles indicates the level of influence.
DESIGN (top-level policy formulation):
* MHESR (Ministry of Higher Education and Scientific Research) - Largest bubble, indicating high influence in design.
* MPMAR (Ministry of Planning, Monitoring and Administrative Reform) - Significant influence in design, linked to MHESR.
SCIENCE AND TECHNOLOGY (focus on research and development):
* ASRT (Academy of Scientific Research and Technology) - Significant influence, linked to MHESR and CBE.
* STDF (Science and Technology Development Fund) - Moderate influence.
* CBE (Central Bank of Egypt) - Significant influence, linked to ASRT.
INNOVATION (focus on implementation and commercialization):
* TIEC (Technology Innovation and Entrepreneurship Center) - Significant influence, linked to CBE, ITIDA, MSMEDA, and IMC.
* ITIDA (Information Technology Industry Development Agency) - Moderate influence, linked to TIEC.
* MSMEDA (Egyptian Micro, Small and Medium Enterprises Development Agency) - Moderate influence, linked to TIEC.
* IMC (Industrial Modernisation Center) - Moderate influence, linked to TIEC.
OPERATION (underlying execution):
* This category encompasses the operational aspects of the listed institutions, indicating their role in active implementation.
Key Notes on Role and Influence Diagram:
* MHESR is the main body responsible for setting national STI policies in cooperation with ASRT (the main technical arm in policy implementation), while the MPMAR is responsible for allocating the budget for both.
* IMC, TIEC, and ITIDA aim to enhance the competitiveness of Egypt enterprise and act as an important intermediary and catalyst for many academia-industry interactions.
* Level of influence: the bigger the size of the bubble, the more influence in the innovation system.
* This influence map is indicative and reflects the insights of the project team rather than a formal statement of roles and structures.
1.6 GLOSSARY OF INSTITUTIONAL ABBREVIATIONS AND ACRONYMS
- ASRT: Academy of Scientific Research and Technology
- CBE: Central Bank of Egypt
- FEI: Federation of Egyptian Industries
- GAFI: General Authority for Investment and Free Zones
- HCST: Higher Council for Science and Technology
- ICTI: Industrial Council for Technology and Innovation
- IDA: Industrial Development Authority
- IMC: Industrial Modernisation Center
- ITIDA: Information Technology Industry Development Agency
- MALR: Ministry of Agriculture and Land Reclamation
- MCIT: Ministry of Communication and Information Technology
- MHESR: Ministry of Higher Education and Scientific Research
- MIIC: Ministry of Investment and International Cooperation
- MPMAR: Ministry of Planning, Monitoring and Administrative Reform
- MOF: Ministry of Finance
- MSMEDA: Egyptian Micro, Small and Medium Enterprises Development Agency
- MTI: Ministry of Trade and Industry
- MWRI: Ministry of Water Resources and Irrigation
- PM: Prime Minister
- SCESR: Specialized Council for Education and Scientific Research
- SCSRC: Supreme Council of Scientific Research Centers and Institutes
- SCU: Supreme Council of Universities
- ST&I: Science, technology and innovation
- STDF: Science and Technology Development Fund
- TICOs: Technology Innovation Commercialisation Offices
- TICS: Technology Innovation Centers
- TIEC: Technology Innovation and Entrepreneurship Center
- TTOs: Technology Transfer Offices
1.7 STRENGTHS AND WEAKNESSES ANALYSIS
INSTITUTIONAL FRAMEWORK
STRENGTHS
- Well-established set of institutions with a focus on scientific research and, to a lesser extent, on innovation
- Science, technology and innovation (ST&I) is clearly identified in the top priorities of the national ‘Vision 2030′ strategy, and the agenda of many governmental bodies.
- The mandate of ST&I key institutions ranges from a focus on scientific research (e.g. the Ministry of Higher Education and Scientific Research (MOHESR), Academy of Scientific Research and Technology (ASRT), Science and Technology Development Fund (STDF) to applied innovation and private sector development (e.g. Ministry of Trade and Industry, and Ministry of Communication and Information Technology).
- There are also institutions mandated to monitor, assess and manage the ST&I indicators (including periodic innovation surveys done by the Egyptian ST&I Observatory).
- A dynamic recent wave of regulatory and institutional reforms
- A 2019 law formed a new entity as the main body responsible for financing ST&I on a national level. The law addresses the bureaucratic barriers that limited the role of STDF in financing innovations and managing innovation outcomes.
- Announcement of the 'Incentives for Science and Innovation' law that focuses on stimulating demand-driven innovation by giving universities and higher education institutions the authority to create business incubators and spin-off startups in collaboration with the private sector. These two laws came as a necessary step to enhance the alignment between scientific research and innovation.
- Existence of business associations supporting young entrepreneurs and business owners
- Examples of these associations: the EJB (Egyptian Junior Business Association), EPEA (Egyptian Private Equity Association), MCSBE (Middle East Council for Small Businesses and Entrepreneurship).
WEAKNESSES
- Institutional gap in the effectiveness and enforcement of the national strategy for research and innovation
- Existing technology roadmaps and strategies are not binding to the relevant actors and there aren't sufficient incentives to encourage the implementation of nationally-coordinated strategies.[^10]
- A primary focus on 'research excellence', boosting the supply of knowledge, rather than the demand and use of knowledge. In response to this problem many actions have been taken, most importantly the 'Incentives for Science and Innovation' law, and recent innovation programmes that focus on engaging both academic and business elements. But the impact of these programmes has not yet been evaluted.[^11]
FUNDING
STRENGTHS
- Diversified mechanisms of public funding on R&D
- There are different funds and grants available from different entities to support applied research, prototyping, and product development. For example: Agriculture Research & Development Fund (ARDF), IMC, ITIDA, STDF, and the ASRT.[^12]
- Financial and non-financial services are available for startups at different levels of maturity, offered by civil society NGOs, governmental entities (e.g. TIEC, INTILAC, NilePreneurs, Bedaya programme by GAFI, etc.).[^13]
- There has been a gradual increase in expenditure on research and development: the gross expenditure on research and development (GERD) has reached 0.61 per cent of the GDP in 2017; in the period between the 1990s and 2017 the average value of GERD was 0.4 per cent, with a minimum of 0.19 per cent in 1999 and a maximum of 0.72 per cent in 2015. GERD will reach one per cent of GDP, according to Egypt's constitution (2014).[^14]
WEAKNESSES
- National funding for innovation and technology is highly fragmented
- Despite the availability of an adequate number of funding bodies, there is a lack of coordination among innovation support organisations.[^15]
- Existing funds and support schemes aiming to facilitate innovations are mostly intended for public and academic entities. This setting increases the gap between the supply of knowledge, and real market demands. Accordingly, business expenditure in R&D is still lower than expected on average and is insufficient.
- Lack of effective monitoring and evaluation system of the different funding schemes and accordingly, the economic and technological impact. Therefore, the fact that public finance of research institutions is not based on clear performance measures and development plans.[^16]
HUMAN CAPITAL / KNOWLEDGE ASSETS
STRENGTHS
- A good active research base with high productivity
- Availability of more than 100,000 pieces of research, 50 universities, 120 research centres and a growing number of civil societies with a supportive role to science and technology.[^17]
- The research community in Egypt is highly productive, as indicated by the number of publications produced and patents filed in the last ten years; during the period of 2005-2014, the total number of international publications by Egyptian researchers was 93,901, increasing from 4,781 in 2005 to 14,875 in 2014, with an annual growth rate of 4.21 per cent in 2014. This rate is exceeding the neighbouring countries except for Algeria and Israel.[^18]
- Large number of qualified scholars in the diaspora; Egypt stands first within the neighbouring countries with almost 61,058 full-time equivalent researchers at the national level in 2015 (covering higher education, public, private and non-governmental organisations) with 55.9 per cent of the researchers having a doctoral qualification.[^19]
- Active international mobility of young scholars; where the number of international scientific missions funded by the government reached 304 missions in 2014.[^20]
WEAKNESSES
- Researchers' work is not always aligned with national need - and not productive enough
- The research community in public sector institutions is represented mainly by the higher education establishments (79.4 per cent) and public research institutions (21.6 per cent), while the private sector are only a small percentage.
- A disparity between the overall number of researchers and overall productivity in research institutions; for example, the Agricultural Research Center in Egypt has a high number of researchers (10,200), yet only 1,491 researchers were active in the last five years by contributing to the production of 1,370 publications.[^21]
- Lack of effective mechanisms for empowering and engaging young scholars in policy planning, with a routine career path of researchers that is not incentivised enough with regard to excellence in science and technology and industry-oriented research.
- Misalignment between scientific productivity and industrial needs
- The educational system does not fully reflect industrial needs, especially in the manufacturing sector. As a consequence, postgraduates are struggling to fulfil the requirements for day-to-day private sector management practice.[^22]
- Only 0.8 per cent of total scholarly outputs are based on corporate collaboration. In this respect, Egypt is outranked by Jordan, Saudi Arabia, and United Arab Emirates, in addition to African countries like Ethiopia, Congo and South Africa.[^23]
- A low number of scientists in physics and mathematics when compared to other science disciplines, where only nine per cent of researchers are concentrated in engineering and science compared to 40 per cent in the medical field and 35 per cent in social science and humanities.[^24]
BROADER ENVIRONMENT
STRENGTHS
- Stable macroeconomic situation
- Egypt's macroeconomic situation has improved markedly since the initiation of the economic reform programme in November 2016.[^25] In 2018, the real gross domestic product (GDP) grew by 5.3 per cent, compared to an average of 4.3 per cent in the three years before, driven mainly by public investments, private consumption, and exports of goods and services.[^26]
- There are promising stabilisation patterns, with annual inflation reaching its lowest rate in more than three years to register 9.4 per cent in July 2019, compared to 30 per cent in July 2017, along with the unprecedented decline in unemployment rates, which is an important stimulating factor for investment and entrepreneurship growth.
WEAKNESSES
- Structural socio-economic problems
- Egypt's weak fiscal position and balance of payments structure highlight significant structural vulnerabilities that are expected to negatively affect upcoming growth prospects.[^27]
- The skill level of the labour market, female participation in the workforce, and the general attitude towards entrepreneurial risk are highlighted as key weakness indicators in the global competitiveness index (GCI, 2018). Furthermore, according to the World Bank indicators, the level of corruption and the burden of government regulation are two important factors that may be affecting the business environment in Egypt in the short term.
ECOSYSTEM CONNECTIONS
STRENGTHS
- Supportive entrepreneurship ecosystem
- Egypt is the fastest growing startup ecosystem and the second largest after the UAE, according to MAGNITT's 2018 Mena Venture Investment Report.
- A growing number of initiatives and programmes that focus on raising scientific and innovation culture and the popularity of sciences. The list of initiatives includes: The Industrial Modernization Centre established in 2000; the four-year Industrial Development Strategy of 2016, the Rowad 2030 programme, public-private partnerships and technology alliances, like E-KTAs, Innovation Clusters Initiatives, etc.[^28]
- A growing number of technology enablers/actors in the innovation ecosystem including business competitions, science and technology parks, venture capitalists, incubators and specialised civil societies.[^29]
- The total early-stage entrepreneurial activity (TEA) rate in Egypt reached 13.3 per cent in 2017 compared to 12.3 per cent (world average).[^30]
- Existence of technology transfer and Intellectual property rights (IPR) offices at the majority of Egyptian universities.
WEAKNESSES
- Lack of scaling up potential for startups
- 98 per cent of Egypt's firms are micro-enterprises, with a missing middle of the 'enterprises pyramid'.[^31]
- There is limited coordination to support startups that exist as part of industrial value chains. Entities (like TTOs and TICOs) rarely communicate governmental and industrial needs in each sector to research institutions.
- A lack of trust between industry and academia, leading to low involvement of industry as a potential key driver to commercialise applied R&D outcomes.
- Micro and small companies' inability to produce and market innovation, which limits their ability to scale up in the market.[^32]
- Informality trap
- The informal sector (businesses and workers that are not formally registered) represents more than 50 per cent of Egypt's economy, and that could be largely attributed to structural problems such as the low scale of formal jobs generation, and the level of bureaucracy involved in registration and taxation. At the same time, this represents a huge burden threatening fair competition in the market and hindering economic reform plans.[^33]
2. CAPACITY BUILDING FOR INNOVATION IN EGYPT
2.1 MAPPING INNOVATION POLICYMAKERS: ASSESSING THE SIZE OF THE CORE AUDIENCE
In the table below, we estimate the number of innovation policymakers at each seniority level within the government. However, it is important to note that the Egyptian Government comprises more than 5.5 million affiliated employees, many of whom are public school teachers (CAPMAS, 2017). Also, the figures in the table should be regarded as estimates only and not a precise indicator.
The numbers are drawn from publicly-available data on government employment, according to the organisation chart provided on the official websites of the main ministries and key institutions identified in the institutional map, combined with insights from expert interviews. For the institutions where no data were available, extrapolation was used assuming similar work structures across government agencies.
| Level of Seniority |
Institutions |
Estimated Number |
| L1 Cabinet Members |
|
10 |
| L2 Top executive management at the key ministries and Coordinating Councils |
MHESR, MCIT, MTI, MPMAR, MIIC, MSMEDA, CBE |
45 |
| L3 Director Generals of Key Institutions |
STDF, ASRT, TIEC, ITIDA, ICTI, TICS, FEI, IDA, GAFI |
18 |
| L4 Deputy Director Generals and Directors of Key Institutions |
|
149 |
| Total Total Core Innovation Policymakers |
|
221 |
http://www.asrt.sci.eg/index.php/asrt-organogram
http://www.stdf.eg:8080/web/page/64152
http://www.ida.gov.eg/webcenter/portal/IDA/pages_board
https://www.itida.gov.eg/English/Pages/OurTeam.aspx
http://portal.mohesr.gov.eg/ar-eg/Pages/Deputies-assistants.aspx
http://www.mti.gov.eg/English/aboutus/Sectorsandentities/Sectors/Pages/default.aspx
http://www.mcit.gov.eg/Biographies
https://www.tiec.gov.eg/English/Pages/OurTeam.aspx
https://www.gafi.gov.eg/english/AboutUs/Pages/default.aspx
https://www.cbe.org.eg/en/AboutCBE/Pages/SeniorManagement.aspx
https://www.gafi.gov.eg/english/AboutUs/Pages/default.aspx
2.2 INNOVATION POLICYMAKER 'PERSONAS'
Head of Research & Innovation Management Department, Higher Education Institute
He has been with Agency X for nine years now. His main responsibilities include directing policy research and formulation with regard to science, technology and innovation, as well as supervising the National Science, Technology, and Innovation Policy Committee and subcommittees.
Prior to this, he was a lecturer at Z University while also working as an innovation consultant with international organisations.
PhD in Biotechnology, Science and Technology Policy.
"The main strength points in the Egyptian innovation system are the availability of public funding allocated to science, technology and innovation, besides a good research base. That means both human and physical resources are available but the missing point is the managerial capability to absorb this funding effectively, and evidence-based, long-term planning, that can define clear areas of focus."
"If there is a rich local database of subject-matter experts and policymakers in the field of innovation, we will have the capacity to overcome many of the challenges facing the innovation ecosystem in Egypt."
“There are a number of projects and grants supporting science and innovation. However, there is missing long-term planning for the programmes that have been initiated."
KEY INDIVIDUAL AND COLLECTIVE CHALLENGES
- Lack of accumulated knowledge and coordination between the key institutions influencing the innovation system;
- Availability of multiple projects and grants supporting science and innovation. However, long-term planning for the programmes initiated is missing;
- Lack of trained staff in key governmental institutions in areas related to science, technology and innovation such as technology management and public policy formulation and evaluation;
- Different parties, e.g. academia and industry, view innovation through different lenses and the need for a unified definition or scope for innovation which complicates communications.
ASPIRATIONS AND EXPECTATION FROM INTERNATIONAL TRAINING PROGRAMMES
- Forming an initial community of practitioners within the Egyptian Government to lead and champion innovation policy development;
- An opportunity for cross-cultural collaboration to boost the diversity of ideas in innovation policymaking;
- Replication of worldwide best practices in an evidence-based policy approach that uses data analytics and statistical tools to showcase realities.
Deputy Managing Director
She has been working with Agency X for five years. She has demonstrated experience in business development and marketing with a focus on introducing innovative products and services that could enhance a firm's positioning, and expand market share. She has held the position of a director and president of business development in more than one international institution and has a Bachelor's in Accounting and Business Administration.
"We need innovation policies to be focused on our major social challenges. A large segment of the labour market in Egypt is informal, which affects the enterprises' ability to innovate, expand or take advantage of the government offered benefits, thus addressing the informal labour market should be a priority to the policymakers."
“The educational system doesn't build calibres with the right mindset and culture to innovate; individuals end up being risk-averse and unaccepting of mistakes."
"Industry sector is not engaged enough in innovation policy planning and formulation; policies should focus on reducing the gap between academia and industry and encourage business investment in innovation.”
"We need to strengthen innovation beyond apps and consumer market applications to tackle major social problems.”
KEY INDIVIDUAL AND COLLECTIVE CHALLENGES
- Policies are not responding to market needs;
- Ease of doing business has improved; however, other business support services are still much lower than the market potential;
- Need for monitoring and evaluation systems on the national level to assess the impact of innovation-related projects. Such systems will help in documenting lessons learnt and scale up successful initiatives;
- Lack of public awareness on the importance of innovation;
- Innovation programmes are not properly advertised and target only a niche segment of the population.
ASPIRATIONS AND EXPECTATION FROM INTERNATIONAL TRAINING PROGRAMMES
- Integrating global best practices in practical policy incentives for business sector investment in research and development and how it can be customised to the local context;
- Being introduced to new approaches to handle organisational resistance to change and conflict resolution that may arise due to innovative projects;
- Focusing on change-making as an integral factor to be considered in designing policies;
- Latest global thinking and best practices in policy development and application in similar economies and the role of policymakers there.
Policy Advisor
He has been working for Ministry X as advisor to the minister for five years.
Prior to that he has worked as senior consultant on science, technology and innovation for institution X for seven years.
PhD in Innovation Management and Bachelor's degree in Engineering Automatic Control.
"The bureaucratic legislative chain is a barrier to innovation development; for policies to be actionable, they need to be translated in the form of enforced laws and regulations."
"Vision is teamplay but policymakers are isolated islands."
"Technology and innovation diffusion is an ongoing long process that entails cultural change and this process is beyond the capacity of individual ministries. A coordinating council is needed to consolidate the efforts in innovation."
'Egypt has rich resources presented in the large number of universities and research institutes, adequate funding bodies and supporting organisations.”
"The law of 'Incentives for Science and Innovation' is a good step for academia and innovation linkage."
KEY INDIVIDUAL AND COLLECTIVE CHALLENGES
- There is a need for coordination among different research centres affiliated to different ministries;
- Universities and research centres need institutional frameworks and reward schemes for conducting industry-oriented research to be able to act as effective knowledge and technology transfer hubs;
- Policymakers need to be empowered and the process of policy impact assessment requires better management and enforcement.
ASPIRATIONS AND EXPECTATION FROM INTERNATIONAL TRAINING PROGRAMMES
- Being exposed to case studies of transition towards innovative societies highlighting lessons learned on macro and micro level;
- Inclusion of fundamental skills like scientific thinking, ideation, and innovation management in the process of policymaking.
3. ASSESSMENTS OF CURRENT AVAILABLE RANGE OF SUPPORT AND TRAINING FOR INNOVATION POLICYMAKERS IN EGYPT
3.1 WORKSHOPS AND CERTIFICATION FOR CAPACITY BUILDING ON INNOVATION POLICY
Since the topic of innovation policy and innovation management is relatively new and has not been taught in the traditional educational programmes, there are a number of projects led by international development partners to current mid-level policymakers to enhance their knowledge in this niche field.
| PROGRAMME | DESCRIPTION ```
