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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telsayedtaha@worldbank.org

cmimarseille.org

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