Interview: Entrepreneurship to boost economic development
Entrepreneurial influence is strong among Egyptian youth, who are overcoming financial, cultural and legal challenges to maintain local sustainable business models that can improve the economy and help decrease unemployment rates.
A key figure in promoting for such an entrepreneurial spirit and a believer in it being the way to boost the local economy is Senior Vice President of the International Council for Small Business (ICSB) Ahmed Osman.
Osman speaks to Business Today Egypt about efforts to boost the segment, challenges and how it is an essential element toward economic and social development.
Osman is also the president of the Middle East Council for Small Business and Entrepreneurship (MCSBE) and a project management advisor for several government and private organizations in Egypt.
With a bachelor’s degree in civil engineering and a master’s degree in engineering and management from the University of Birmingham in the UK, Osman has gone on to become a certified project management professional from the Project Management Institute in the US.
How do you define entrepreneurship?
Primarily, entrepreneurship is a mindset of a person who is a risk-taker, who wants to be a job creator instead of being a job seeker. So, he starts his own business, whether it is a social business to help the community or to gain profit and employ others.
How did your interest in small and medium-sized enterprises (SMEs) start?
I’m a small business owner; I have a project management firm with 40 full-time staff, my interest in helping SMEs and young entrepreneurs came from my need when I started 20 years ago; I didn’t know how to establish a new business. To start a business, you need lots of information to guide you; so I decided to work on paving the way for young entrepreneurs.
From Left, Vice President of the International Council for Small Business Ahmed Osman , General Ahmed Abdullah - Governor of Red Sea , CEO of Tatweer Masr, Mr.Ahmed Shalaby , Ambassador of Canada in Egypt, Mr.Jess Dutton
How would you assess the developments we saw in 2017 in the field of entrepreneurship in Egypt?
I saw noticeable change in the government’s vision recognizing entrepreneurship and SMEs. The Ministry of Trade has a micro and SMEs development agency and is now developing a five-year national strategy to promote SMEs, especially in industry, to guide and train young people on how to make a business plan, gain funds and work sustainably.
On the social level, we have seen good events in Egypt that support the entrepreneurship ecosystem, like the Rise Up and Egypt Entrepreneurship Summits.
Indicators for 2016 and 2017 show that entrepreneurship is a positive spot in the economy. A new $50-million venture capital fund has been launched, regulatory reforms enacted, new educational curricula piloted and several support educational organizations launched, according to the Global Entrepreneurship Monitor (GEM) and Egypt National report 2016/17.
Societal perceptions of entrepreneurship are highly favorable, as 83.4% of Egyptians perceive entrepreneurship to be a good career choice.
In terms of age distribution, there is a noticeable increase in the percentage of youth who decided to start their own business, especially those in the age bracket range of 18-24, constituting 16.2% of Egyptian entrepreneurs. This growth in youth entrepreneurship may be attributed to higher awareness and interest to have independent career, or potentially an alternative path, given the high youth unemployment.
The total early stage entrepreneurial (ETA) activity rate, the primary metric used in GEM, is 14.3% in Egypt, which is higher than the global average of 12.3%.
Rise Up Summit - Facebook official page
What about the engagement of women in Egyptian businesses?
Female entrepreneurs globally have great potential to drive economic growth, and many of today’s most widely recognized companies and brands are owned by women. However, in terms of gender distribution in Egypt, one in every four entrepreneurs is a woman, and two in every 10 established business owners is a woman, according to GEM.
The report adds that women-led business have a lower portability of continuation compared to male-led business, and that the rate of female participation is much lower than global averages. We need to understand all the challenges women face, and work on supporting those who have established businesses to sustain and grow, providing incentives for more women to be self-employed and support their communities.
What are the main challenges young entrepreneurs face when they start their own business?
They fall in love with their business idea without enough market research and effective, evidence-based decision-making to know if there are customers who would like to use their services or buy their products.
They also need access to finance, information, talent, education and market means by which to sell their service or product, and then learn how to compete with the local and international market.
Concerning the regulatory reforms, I hope the new law for SMEs would give the startups tax breaks and incentives. President Abdel Fattah El Sisi has spoken about entrepreneurship in several events, which is great change in the government’s mindset, which proves their belief in the role of young people to lead the economy.
Egypt Entrepreneurship Summit 2017 - Flicker
How does the MCSBE support SMEs in the Arab world?
The Middle East Council for Small Business and Entrepreneurship is an affiliate of the International Council for Small Business (ICSB) covering Egypt, Jordan, Saudi Arabia and Morocco. It is linked to the ICSB global network of affiliates and members from 70 countries around the world. Members include representatives from government bodies, universities, business associations, banks, venture capital companies, donors, consulting companies, large corporations and entrepreneurial companies, business development service (BDS) providers and development NGOs.
We provide a platform to empower university students and researchers to build successful companies from their ideas. We focus on entrepreneurship as a practical discipline, exposing our participants to an extensive network of experienced entrepreneurs and professionals.
One of our major events is the Egypt Entrepreneurship Summit (EES), which focuses on innovation, professional development and networking. The summit offers a meeting point for entrepreneurs, businesses, educators and policymakers to discuss how to overcome new challenges in business. It is held under the patronage of the International Labor Organization and Egypt’s Ministry of Investment and International Cooperation.
We also hold competitions like the Nawah Social Entrepreneurship Competition we started three years ago, and we hope in 2018 to take it regional and call it Nawah Arabia, whereby country teams can compete with their brilliant ideas that have social impact and help their communities. We will also host Arab finals, similar to the INJAZ Al-Arab Young Entrepreneurs Competition.
We aim to hold an annual world youth entrepreneurs expo. Under this event, we will try within the 55 countries where ICSB exists to identify five strong entrepreneurs from each country, bringing them together under one roof every year to support information sharing and economic collaboration.
Egypt Entrepreneurship Summit 2017 - CC Flicker
What are your recommendations to improve entrepreneurship environment?
There is a positive trend for entrepreneurship in Egypt, entrepreneurial intention is growing, and more individuals are expressing the initiative to start their own businesses. We should make good use of that.
Policymakers, private sector, civil society, research educational institutions and business incubators should collaborate and work on improving regulatory barriers constraining the launch and growth of startups.
Ideally, they should create new business incubators for SMEs to fund startups in specific sectors, targeting women entrepreneurs, especially in Upper Egypt and poor areas. An entrepreneurial culture could be supported through promoting successful entrepreneurship role models in the media, and by offering entrepreneurship curricula in schools and universities.
The private sector should engage small, local businesses in its supply chain, and out of their CSR budgets, to help train entrepreneurs and invest in startups.
Proud & happy: the winners of this year's Nawah Social Entrepreneurship Competition. They look forward to enter their new world of opportunities where they can realize their business ideas. Welcome to the labour market #GEW2017 #EES2017 https://t.co/RPZyOuAZsp pic.twitter.com/ua5BLhw84T— ILO Cairo (@ilocairo) November 17, 2017
How do you perceive the future of Egyptian economy?
The Egyptian economy faced main challenges this year, be it the effect of devaluating the local currency or energy subsidy cuts, but the economy remains functional and manages to survive.
We need to depend more heavily on industry and production to be self-sufficient and decrease our imports.
Furthermore, I believe that the three industries which will flourish within the next three to five years include construction and real estate, as the government is building new cities, especially the promising New Capital project.
The third prominent industry is technology, where Egypt has an advantage given its young population. There is a lot to be done in the Arabic content domain in the internet, in the outsourcing industry and in the value-added technology services to multinational technology. This is especially true since we are closer to Europe and more convenient than India.
There is demand for industries providing more long-term jobs for people, and now the government is putting restrictions on importing, so the public’s attitude toward manufacturing and industry has to improve.
Egypt’s population of 100 million is the largest market in the Middle East, a great advantage to any investor.
Vice President of the International Council for Small Business Ahmed Osman