Marc Penzel, Founder & President of Startup Genome: Hi, everyone. Welcome to Startup Genome’s Candid Conversations format. For those of you who are joining for the first time, this format is to share a voice and shine a light on startup ecosystems everywhere. Today, I'm very pleased to be joined by Dr. Hossam Osman , Vice President of Egypt's IT Industry Development Agency. Due to the last couple of years in development that we've seen in the Middle East and North Africa, we would really love to understand, beyond our analysis in the Global Startup Ecosystem Report, what is going on in Egypt. What are some of the most exciting trends that we've seen? And therefore, a very warm welcome to you, Dr. Osman. Thank you for joining us today.

Dr. Hossam Osman, Vice President of ITIDA: Thank you very much for having me. A pleasure to be part of the global ecosystem, for sure.

Marc Penzel: Would you like to take a minute or two to briefly introduce ITIDA and your role within the organization?

Hossam Osman: Sure. ITIDA is a governmental entity in Egypt. It's mandated with fostering the ICT industry. And, of course, the main driver for fostering the industry is through innovation and the startup scene in Egypt. So we have within ITIDA technology, innovation, and entrepreneurship centers: TIEC, an entity that's very much focusing on the startup scene and how we can foster it and enhance it from the early stage, up to the maturity stage, and this is really the main entity I'm responsible to handle within ITIDA.

Marc Penzel: Thank you so much, and during the last 18 months, I mean, obviously, a lot has happened, right? We've had the pandemic, and at Startup Genome, we've done a lot of work to analyze the impact of the pandemic on the startup ecosystems everywhere. Maybe you could shine a light on how the COVID-19 pandemic had an impact on the Egyptian startup ecosystem and also how ITIDA worked to solve parts of the challenges that arose due to this pandemic.

Hossam Osman: Yeah, sure, of course. One area that we have focused on during the pandemic is capacity building for the young population we have in Egypt; as you may know, really the main force for enhancing the ecosystem in Egypt in general. And in greater Cairo, the main focus area in particular is the talent pool that we have in Egypt.

So, of course, we decided to, during the pandemic, to really focus on how we can have a nationwide initiative to build the capacity of youngsters in Egypt everywhere across the different governors so that they have the ability to work remotely in a better way, and at the same time, to enhance their skills to be able to do better living.

Like one area we really decided to focus on during the pandemic is freelancing, how we can really help ladies and males and females actually everywhere in Egypt to make a living at doing remote work. And for that, we focus on the digital skills in general and the freelancing skills in particular. What are the skills that are most needed, and how we can really, in addition to building those skills, how we can teach you the skills needed to work in the gig economy, to be able to have a profile and to be able to manage your time in a good way? Of course, this is done parallel to a mega project to improve the ICT infrastructure in Egypt. And this was very important as well during the pandemic. Hand in hand, you give them the skills they need to work remotely and digitally, and at the same time, to give them their infrastructure that’s fast enough and reliable enough.

We actually launched it at 18 months, you're going to have exactly a year and a half. It's actually ending this November; we launched an initiative that we call Future Work is Digital. FWD. Like Egypt FWD and the platform EGFWD.com. And it's, as I mentioned, it's an 18-month initiative that will do both. We do capacity building in three different tracks. One of them is digital marketing, the second is data science, and the third is web development or platform development. It’s web and mobile application, as well as cross-platform development for both. So within each track, you have four levels. You have the challenge level, the starting level, and you have the professional and the advanced and the expert level. You have four levels.

Of course, you see from the levels that we are targeting to introduce everybody. So if you are a lady in Upper Egypt and you don't really have an ICT specialization as part of your studies, you still can join any of the three tracks. Of course, it would be easier for you if you join digital marketing. Because it's kind of a generic program that will help everybody to start to really join the digital world and doing some work online.

But as well, you can start doing some simple stuff with data, like you can join the data track and do data cleansing, data visualization, some simple Excel work on the data track as well, and if you have the guts and the ambitions, you can join the web and mobile development track. So, within the three tracks, as you see, we have kind of a generic track, like the digital marketing track, and you have some deeper tracks when you go to the web development. But once you have the four levels, again, you can start whether you have ICT specialization or not, so he or she anywhere across Egypt, it's a kind of an online virtual university that will help you really somehow master the skills needed very much in general, and, of course, within the pandemic, it is needed even much more.

And let me here focus, maybe it would be useful to highlight that it's very important, in that case is to, somehow I'm not talking about, to additional capacity building and traditional learning. We selected a technology provider that's known to be project-based, and this is very important: it's not course-based. If it’s a two months’ or three months’ program, you don't take courses, but you do projects, and this is very important. I hope I emphasize it enough.

It's project based, so from day zero, you have a depository on GitHub and you have your own profile, and you are building a CV. And this is extremely important that it's project-based, so you pass from one stage to another based on a project that you implement. A practical, real-world project that you need to complete successfully. And that's how you move from one level to the other, and you have, of course, the option once you finish the professional level to go to the advanced, to go to the expert level, and to complete all the tracks in sequence. And meanwhile, in parallel, as I mentioned, we connect you with popular freelancing platforms like Upwork and Freelancer.com and Google and others for you to have a profile and start bidding and start working. This, for us, was very useful, because now, during the pandemic, you need to keep them learning, to keep them busy, to keep them making a better living for themselves, even if they are anywhere in Upper Egypt and different governors away from the capital.

That's why we really were very keen to assess what we are doing with them. So we used to measure how many gigs they get, whether they got successful gigs and completed successful gigs or not. Like some sort of estimating the annual earning they are making. So doing this so far, up to now, we have something like, let me say, talking about something like 140,000 Egyptians. Remember, please, that Egypt is over 100 million in population.

Where when you need to make an impact, you need numbers. You don't talk about thousands or tens of thousands as in different places, but you talk about hundreds of thousands. So far, we have trained over 140,000, and we have over 80,000 graduates. And one important part here that we have an international certificate. They not only have a practical GitHub profile, but as well, they have an international certificate, so that they make the positioning even much better, so we have over 80,000 and, if I remember right, as per our last assessment, they are close to 130 million US dollar annual earnings, add-on annual earnings from freelancing.

So this for us, FWD Egypt, the Future Work is Digital was really a key initiative that we have seen very successful, very impactful during the pandemic. And let me also, maybe I add a little bit more info for this to be more impactful. And Marc, let me highlight that it's very useful as well to augment it with some physical on-site activity, taking care, of course, of the pandemic situation. So we have augmented this with some study groups starting to launch what we call freelancing cafes in innovation hubs here and there across Egypt to start doing in parallel some startup competitions, some business plan competitions, some courses about technology, use cases. Like when you learn about blockchain, but you need to understand, what is it useful for? What can I do with blockchain?

So we are focusing on use cases for advancing emerging technologies, whether Internet of Things, cyber security, blockchain, different ones. It's very important that you really focus physically somehow because you need some mentoring direct interaction to teach he or she what to do with technology learned in Egypt FWD and they can make a business, how they can make a living out of freelancing. So augmenting the capacity building program with some on-site physical activity within innovation hubs across Egypt, I believe, is very, very useful as well.

Marc Penzel: Fascinating. It's really good to hear that you're working on the talent pillar, which is such an important cornerstone of any given startup ecosystem we're working with and we're looking at.

I want to ask you, because oftentimes, we see a difference between the general availability of talent and the access to talent for the startup entrepreneurs, right? Because oftentimes, there is competition between some of the more established corporations and the startups in the ecosystem. Could you talk a little bit about this as a follow-on question: how do you work to ensure that, you know, sometimes also the startup entrepreneurs, they have a voice in the market, and they have access to some of the talent that you're training with your programs? That would be fascinating to hear.

Hossam Osman: Yeah. First, it’s good to mention that, once you mentioned talent, of course, we have the Startup Genome methodology in mind while doing our own activities and initiatives, and we understand how you assess the talent. And we're glad that Cairo has come like among the top 15 global ecosystems when it comes to access to affordable talent.

So we understand that, and this, by the way, it has an impact on how we plan, and this is something that's really important to highlight as well, because we understand that if you need to somehow avail a talent at a good, competitive cost, you don't really have to focus on a certain area but somehow expanding learning here and there, of course, that in an area like the capital of Egypt, Cairo, it's more expensive compared to Upper Egypt.

So if, somehow, you do virtual university across Egypt as a whole, you somehow balance the cost and you ensure that you will be able to access good talent with good quality at an affordable cost for startups to be able to access. Certainly, we have some challenges, because as well, we are facing in Egypt, the issue of the end to end, that's for sure. And we have numbers, especially within ICT, we have some… like you know that Egypt is among the top 15 when it comes to offshoring and outsourcing as a global services location as fairly recently polled. So we have captive centers, we have offshoring centers in Egypt, and, of course, those centers are in critical need of talent. And we have many, of course, as similarly multinational and local companies competing with the startups on talent.

In addition to the talent need, as I mentioned, in some regions around us, some neighborhoods and in Europe, so we have some challenges that especially middle management and some seniors will, at one moment, they go overseas. And that's why it's important to keep the pipeline robust and sustainable to ensure that you have enough supply.

So, what we are doing now, we are launching a kind of a national registry to keep records of the different talents that we have trained across the different programs that we run. And somehow we avail this through the service we offer to our own startups and all the startups within the ecosystem that they can access this platform and get our support and how to really hire and employ those talents. In addition to that, we have an increase in the number of startups working in employment and recruitment.

This is another good sign, because again, due to this freelancing model and remote work model, now I see many development centers, offshoring centers, outsourcing centers being established, and they are still on a small scale, but they are keeping records of good talents here and there, and the advantages through different channels. Some of them are mobile-based and lateral, web-based availed them to different startups in Egypt. But let me say that it's still a challenge to ensure that you have talent that very much matches needs of different startups in Egypt, but I believe once we launch and are complete that we're just trying to be much better.

Marc Penzel: Perfect. Thank you so much for sharing. I would love to understand what's happening in ’22 for ITIDA. What are some of the other areas that you will be working on, apart from the registry? I'd love to hear some of the priorities for you.

Hossam Osman: Actually, there's so many priorities, because it's, of course, the competition with the post-pandemic situation that's really still fuzzy and developing across many, many dimensions, but let me say that the first thing that we are focusing on is to expand the somehow virtual-physical innovation platform across Egypt. We are now targeting to establish on-campus of each university a community innovation hub.

This is very important, again, to augment with what we do virtually and to be able to add the personal touch when it comes to the quality of founders and startups. And while doing so, one thing that's extremely important is somehow to get good collaboration with brands, with big names, big ecosystem enablers, and this is very important for us. We need to work with some overseas names that have done it elsewhere.

Okay, with specific criteria in selection. Let me give you one example, that we see a weak spot in Egypt is how we can add startups to supply chains of corporate. How we can do this, how we can have a platform where startups can work with corporate. This is a very big challenge. The same to access government of contract, again another challenge, so you need a platform where really startups and businesses can meet. So once we did some research on that and we decided to somehow agree and collaborate with Plug and Play, and now they will run one of our own hubs in Egypt, a big hub that we have in Cairo, so we signed an agreement, starting from like last month, for them now to be hosted and localized in Egypt, very prestigious name and very successful in so many places, to come and operate such a hub and provide because that's the main business model is to provide the platform where they connect corporate with the startups. Because this is really the area that they are very successful at doing, and they have done it elsewhere, so as ecosystem enablers, they are very successful as well.

What we are looking for, still another challenge area, related to actually two aspects: one is how to better train founders. Founders need somehow to keep a robust pipeline and sustainable supply chain. You need some focus on early-stage startups when it comes to founders’ capacity building and boot campaign starters. So again, we are in serious discussion now with another big Silicon Valley brand, working with them to somehow get them again onboard to Egypt, so that they can manage another hub in Egypt and they can address that challenge of founders’ education, hub manager education, and early-stage startups bootcamping. So working with big brands from overseas is a strategic step that we are keen to emphasize more in 2022. In addition, of course, to expanding, as I mentioned across Egypt to have a big network, where we can augment what we do virtually with what we can do physically on the hubs.

Marc Penzel: Perfect. Thank you. I mean, we cannot overemphasize the importance of global connectedness, right? We've seen that in our research, and we really emphasize the ability for the local ecosystem to connect with global peers, be it the founders, be it the investors, the accelerator leaders, but also, you know, really everyone in the community to understand what is happening in other ecosystems and what can we learn as we grow our companies, as we lead our investment funds, etc. So it's really good to hear that you're working to recruit and actively conversing with international brands that have been there, done that, right?

Last but not least, Dr. Osman, I would love to hear, now that we have this global audience in front of us, are there any specific events and opportunities for people to connect with the Egyptian startup ecosystem in the next year? We'd love to hear about it.

Hossam Osman: Yeah, of course. The nice thing is the big names, like whether we agreed with like Plug and Play, they come with their own networks and they have a very good network of startups and investors as well. So of course, we plan to have with them a minimum of one mega event every quarter, so that we can get them the global overseas startups interacting with our own. Simply, I mean, of course, as everybody can perceive, scaling is about globalization, and that's why any sort of startup, it needs to be born with global from day zero. So it's very important for us to exchange experiences and challenges, and that's why we have a plan to do mega events, some international event activity, we invite... like we’ve done a very big investment event like maybe in March, last March, we are keen to do another one in coming, maybe March or April.

So we will have a mega event, and we're pleased, of course, to invite the whole Startup Genome network to come to Egypt and so that we can interact and engage for the benefit of the whole global ecosystem, for sure.

Marc Penzel: Perfect. Thank you so much. We’ll extend the invitation to our network. As I told you earlier, I met a few Egyptian entrepreneurs at the Web Summit just two weeks ago, and I also promised them that I would come over to get to know the Egyptian ecosystem a lot better during the next couple of months. Thank you so much, Dr. Osman.

Hossam Osman: Have a good day. Thank you very much, Marc.

Marc Penzel: Thank you for these insights, yeah. Very fascinating conversation. Thank you so much for sharing all of these insights with our global audience. To our listeners, thank you so much for dialing in, and thank you for listening, and really hope to welcome back all of you next time for another round of Candid Conversations. Thank you so much, everyone.

Hossam Osman: Thank you. Bye bye.

Marc Penzel: Goodnight.