Outsourcing in Egypt

Egypt is gaining popularity as a location for IT outsourcing. As Sourcing Line states, “in 2008, Cairo was ranked 7^th on the top 50 emerging outsourcing cities, and Egypt was bestowed with the title of “Outsourcing destination of the year.” As reported by the Yankee group, Egypt is by far the Middle Eastern country best positioned to take great advantage of the outsourcing boom. Egypt has the best to offer when it comes to average wages and low infrastructure costs. Egypt is also westernized, and opened to westernization, and the diverse population speaks English, German, French, Spanish, and many other languages that support the multi-lingual labor. Egypt’s geographical location between Asia, the US, and Europe puts it in the prime place to serve the world. Many multinational companies have invested in Egypt already, including IMB and Microsoft. Egypt also has a Smart Village, a 600-acre business park just outside of Cairo. It is designed to become the Middle East Center of Information and Technology, and industry analysts are saying good things about the next few years in Egypt in terms of IT and outsourcing. “Analyst Datamonitor predicts that the demand for Egyptian call centers will grow by 50 percent over the next three to four years,” states Sourcing Line. Things are looking good for Egypt, whose IT industry plans to generate around $10 billion in revenue in the next ten years.

There is one problem, despite the potential that Egypt has in terms of outsourcing. Egypt has a very unstable political system, which can prevent foreign investors to be attracted to outsource to Egypt. As predicted, the IT industry is estimated to bring about $10 billion in revenue in the next ten years. But, as recent events have unraveled in Egypt, with political uprisings and the problems with infrastructure and government, it has become less appealing to foreign investors, and dampens the chance of it actually reaching the projection of 10$ billion in 10 years. If Egypt were to clean up its act, and have a more stable geopolitical system, these projections made by analysts may surpass the goal in revenue.

Egypt has invested millions to promote its sourcing capabilities. But, with the recent threats of political unrest, these investments are also under threat of not serving their purposes. Top internet providers such as IMB and Verizon rely on Egyptian resources and as Horses for Sources states, “largely for call center work and software support and development, its hazardous when the government shuts off the Internet and all hell is breaking loose.”  Social media is clearly fueling unrest in the Middle East, and if situations such as what happened in Egypt in terms of the Arab Spring happen again, the first reaction of governments now seems to be to shut off the internet.  This obviously impacts IT services that are reliant on the internet in the Middle East to succeed, and there needs to be a stable political environment for this to happen also. This is a serious blow to nations that seek to outsource to Egypt. But, the questionable political instability is a hindrance.

Works Cited

Fersht, Phil. "Egypt’s Crisis: Where Social Media Threatens Global Outsourcing." Egypt’s Crisis: Where Social Media Threatens Global Outsourcing. Horses for Sources, 30 Jan. 2011. Web. 01 Apr. 2014.


"Outsourcing to Egypt." Sourcing Line. Sourcing Line, n.d. Web. 01 Apr. 2014.