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Tamer Taha – Consultant, CMI/World Bank
January 17th 2011 - Cairo
MENA confronting various challenges specific to the region
Demographic pressures
Alarming level of unemployment
Environmental degradation
Brain drain
Skills Mismatch
Political instability
New-social pact is needed → Knowledge-based Economy!
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Opportunities
→ Young & Skilled workforce?
→ Green Growth?
→ Skilled Diaspora?→ Intra-regional Integration?
→ Democratic shift?
Multi-partner platform since 2009
Network of Networks
5 Clusters & 17 programs
KEIT: 3 programs -> Financing Innovation projects (IT1), ISI@MED (IT2) & KE for Growth & Emp.
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Quality of the labor demanded > Educational System output
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The Number of jobs created < New entrants in the labor market
Integration??
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MENA competitiveness is still concentrated in resource-based industries.
Lack of incentives and financial tools to promote innovation (venture capitals, tax deduction for R&D activities for the private sector...).
Entrepreneurship -> Informal Sector and/or Tendency to Emigration
Cost is still seen as the competitive advantage of many of the current
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Source: Taha T., CMI, 2010
Egypt has conducted many reforms making it easier to do business and attracting FDIs
However, growth was not triggered by a Knowledge –based Competitiveness
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Source: Derek Chen, WBI, 2011
Source: Derek Chen, WBI, 2011
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More Jobs – Less Equity
Less Jobs – More Equity
ANIMA, 2011
Call center function 299R&D center function 211Textile 196Consulting and services to companies 136Software (services) 103Electronic components (production) 103Agribusiness (production) 77Logistics platforms 67Automotive and aeronautics 63Green techs 39
13ANIMA, 2011
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Unemployment rate per Educ. attainment
…But innovation system in Egypt still faces many challenges, notably for SMEs:
Institutional
Financial
Technical
Product Innovation vs. Process Innovation
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• Egypt ranked 97th worldwide in KEI
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Growth was mainly driven from “rent” industries.
KE is not only important for creating jobs, but also for saving existing ones in sectors with diminishing competitiveness
There is a need to encourage these sectors to upgrade their value chain!
Turkey: R&D are exempted from taxes
KE is not only a set of isolated policies… but a VISION for inclusive development
Coordination among different governmental sectors would help raise efficiency in the Egyptian innovation system.
That vision needs a sequence of “Quick Wins” to start the new social contract in a trust-based society.
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