Entrepreneurship and innovation... The future of SMEs in Egypt
The small and medium enterprises sector has received great attention from the Egyptian government during the past period. However, this sector is still facing many challenges, which requires increasing the interest in entrepreneurship as well as encouraging innovation, as they are both considered the key to economic development and the starting point of this sector. In this context, Canada Egypt Business council and the Egyptian council for sustainable development organized an event with Dr. Nevine Gamea, Executive Director of Small and Medium Enterprises Development Agency; Mrs. Eman Omran, SMEs Program Team Leader Global Affairs; Ms. Reem al Saadi, Program Director European Bank for Reconstruction and Development; Ms. Amal Moafy, Chief Technical Advisor International Labor Organization; Mr. Ahmed Othman, Senior Vice President, International Council for Small Business and Ms. Hanaa El Helaly, United Nations Expert for Sustainable Development.
In the opening remarks, Eng. Motaz Raslan welcomed all members and guests, and then he mentioned that we have been late in considering the importance of small and medium enterprises in promoting sustainable development, especially that 70 % of the economy is based on SMEs and about 90% of labor force is employed by this sector. He added that the government is now putting planned strategies and has taken certain decisions for developing that sector and for increasing its contribution in the Egyptian economy, through specializing 200 billion Egyptian pounds for financing SMEs, and through the Central Bank of Egypt initiatives for supporting SMEs sector; and most importantly, setting up Small and Medium Enterprises Development Agency. He explained that we have many hopes on the SMEs sector after overcoming all challenges facing it as well as facilitating the process of financing new projects and encouraging entrepreneurship and innovation, as they are the key for future economic development.
Ms. Hanaa El Helaly, United Nations Expert for Sustainable Development, mentioned that the SMEs sector is one of the most important sectors for economic development and that we should concentrate our attention on the needs of SMEs and the challenges that are facing this sector as legislations & laws as well as future plans & strategies. She also mentioned the importance of the Small and Medium Enterprises Development Agency, adding that the session is a combination of cooperation between International Cooperation committee and the SMEs agencies; which are all international organizations that are having one aim and one goal. She further explained the importance of non-financing services for SMEs as these services are of very high importance for this sector same as the importance of marketing. There are also some successful stories, but there is still some failure, so we must know the reason behind these failures and fix them to avoid their occurrence in the future.
A documentary was played where H.E. Tarek Kabil Minister of Trade and Industry said that entrepreneurship is the future of Egypt, and that the ministry has developed a program which trains the youth to transform their ideas into reality, into a project with a foundation and into a company to help it grow. He added that he wants all the youth to share in that program and that the ministry will train over 10,000 trainees in order to build the future of Egypt.
Dr. Nevine Gamea Executive Director of Small and Medium Enterprises Development Agency, firstly explained that the agency was established in April 2017, as a decision from the prime minister to replace the Social Funds, through sharing the database to develop the whole sector all over Egypt, & not only to provide the needed services. She discussed that this mission needs a different strategy which combines planning and applying, where the planning process contains all the targeted goals and how to follow them and the applying process contains those who will follow-up that the correct steps are being taken and that the agency is on the right track. On the other hand, she mentioned the launching of the training initiatives which aims to support & encourage new small and medium projects, it was explained that every step that is taken towards entrepreneurship and innovation is considered a positive indicator to the youth because it points out to the successful stories of the youths who were trained or received the training with the ILO, in addition to the graduation of a group of certified trainers. She further explained that many of the Egyptian youth hope to be self-employed and apply their new ideas, where this project will highly help them to make the right steps instead of taking uncalculated risk. She added that the following phase will be the improvement phase, or development and scaling up of the project.
Mrs. Eman Omran, SMEs Program Team Leader Global Affairs, mentioned that Canada has been working in Egypt for the past 25 years in the field of development, which is denotation of business development services. Then she summarized several projects that the global affairs have been working on, as in the past most projects were focusing on access to finance, but now they are brought into different models of packaging, branding, quality control, diversification and marketing, and because of that all the projects integrate entrepreneurship, financing and business development services in an integrated approach.
Mr. Ahmed Othman, Senior Vice President, International Council for Small Business, mentioned that Egypt is facing many problems in that sector especially in financing, tax, the challenges facing the economy and the need of specified laws that an entrepreneur should be aware of. He added that the new investment law is expected to solve some of these problems, in addition to the new agency and trainings. Also the government’s role in regulations will solve some of our challenges, and it should be a catalyst that encourage the youth to build their startups, and make the youth absorb the idea that any success comes after several failures.
Ms. Reem al Saadi, Program Director European Bank for Reconstruction and Development, explained the role of the bank which is financing and development. She clarified that the bank was established by 65 countries that aim to provide loans for small and medium enterprises, where the bank was found in Egypt in 2012, and during the past year it has invested around 1.4 billion dollars which was double the target.
The floor was then opened for questions and answers sessions, where several ideas and suggestions were discussed considering the SMEs sector and how to develop it.