The Minister of Communications and Information Technology Amr Talaat has met with several entrepreneurs and tech startups founders, within the framework of the “Startup Day” event organized by the Ministry of Communications and Information Technology (MCIT) at Creativa Innovation Hub in Sultan Hussein Kamel Palace. They discussed various topics related to promoting the growth of the tech startup sector and overcoming the hurdles facing entrepreneurs.

In his remarks, the ICT Minister emphasized that the size of the global startup ecosystem is about $3 trillion. He added that the startup sector is one of the main pillars in all economies, whether in developed countries with major economies or in countries with emerging economies.

The ICT Minister underlined that venture capital investments have declined worldwide over the past two years. He pointed out that the decline rate in investments in the startup sector worldwide has reached over 54% during the first quarter of 2023 as a result of the economic and geopolitical crisis as well as the interest rate increase.

Talaat pointed to the decline in startup investments in the Middle East and North Africa (MENA), Turkey, and Pakistan during the first quarter of 2023 by 70% compared to the first quarter of 2022, forming a challenge for all system elements, including startups and other supporting elements such as government, civil society organizations (CSOs), or the private sector.

The ICT Minister explained that Egypt has achieved growth in ICT startup investments by 3-4% during 2022 compared to 2021, despite the growth decline regionally. Egypt ranked first in MENA in the number of VC deals during 2022, reflecting startups’ ability to innovate and provide valuable solutions. He added that Egypt has achieved growth in the first quarter of 2023 and ranked second in MENA in the volume of deals.

Talaat reviewed MCIT efforts in supporting startups through four pillars. The first pillar includes accessibility to the public sector through marketing access for conducting business operations with the public sector or to facilitate the procedures required by various agencies.

Talaat revealed that, following last year’s meeting with entrepreneurs, MCIT cooperated with the General Authority for Investment and Free Zones (GAFI), the Ministry of Finance, the Egyptian Tax Authority, the Egyptian Customs Authority, and the Financial Regulatory Authority (FRA) to facilitate procedures for startups. Currently, MCIT is cooperating with GAFI to facilitate the establishment of virtual companies and the possibility of registering startups headquarters at one of Creativa Innovation Hubs. In addition, cooperation is underway with the Egyptian Tax Authority to facilitate tax procedures.

The ICT Minister pointed out that the second pillar is access to talent pool by providing several training programs and initiatives to increase the number of trained calibers required by major global and local companies and startups in the labor market. Furthermore, the “Skill bank,” including human calibers trained by MCIT, will be available through the Information Technology Industry Development Agency (ITIDA) so that startups can communicate with them, he added.

The ICT Minister stated that a laboratory for creating government applications is currently being established in cooperation with the German Agency for International Cooperation (GIZ) at Creativa Innovation Hub in Giza. Startups, through the lab, will be invited to design programs that will be used in different government procedures, and contracts will be signed with successful startups. Moreover, startups’ employees will be trained on the needs of public agencies in terms of applications and solutions.

Talaat remarked that the third pillar is the accessibility to foreign marketplaces through exhibitions held abroad to provide an opportunity for companies to showcase their products and solutions. He added that networking forums will be organized to invite startups and entities operating in each sector to facilitate these companies’ access to all sectors.

Talaat explained that the fourth pillar is the accessibility to investments through cooperating with the Central Bank of Egypt (CBE) and GAFI to provide venture capital firms to facilitate investment in startups, whether in terms of performing procedures or obtaining financial resources.

He added that MCIT signed an agreement with Plug and Play to run Creativa Innovation Hub at Sultan Hussein Kamel Palace and Global 500 to run the Hub in Giza to transfer experiences, boost investment in startups, increase the number of incubated startups, and train youth nationwide to run Creativa Innovation Hubs.

The ICT Minister revealed that Creativa Innovation Hubs are established to provide a value chain for startups, targeting reaching a total of 30 Hubs nationwide. He remarked that eight Hubs have been established; 17 new Hubs will be opened in 2023; and the other Hubs will be opened in 2024.

Startup Day included a panel session titled “Startup Day: Towards a future vision for sustainable leadership.” It was joined by ITIDA CEO Ahmed Elzaher, GAFI CEO Hossam Heiba, Founder and CEO of Techne Inc. and Founder and Chairman of the Mediterranean Business Angel Investment Network Tarek El Kady, Country Director for Plug and Play Tech Center - Egypt Karima El Hakim, Founder and CEO of RiseUp Summit Abdelhameed Sharara, and Program Director of ‘500 Global’ in Egypt Ezzeddin Zahzah.

The participants explored the success elements of the Egyptian tech startup ecosystem and discussed improving entrepreneurship and sustainability of startup growth in Egypt.

Elzaher highlighted that the abundance of innovative entrepreneurs in Egypt is one of the most significant factors for the success of the Egyptian startup sector, which is growing for the fifth year in a row. He referred to ITIDA programs and initiatives aimed at creating an enabling ecosystem, supporting the value chain in the promising sector, and covering its various phases.

Elzaher added that ITIDA is cooperating with venture capital firms and operators in Creativa Innovation Hubs, targeting, through its cooperation with Global 500 and Plug and Play, supporting about 300 Egyptian tech startups. He pointed out that ITIDA also focuses on stimulating the growth of startups specializing in electronics design and embedded software.

Heiba highlighted GAFI ongoing communication with startup founders. He referred to GAFI efforts to boost investment in the startup sector, overcome the hurdles, and improve Egypt’s ranking in international indices by creating a legislative environment in line with startups’ nature of work and requirements, amending laws, and highlighting existing ones for the benefit of startups.

GAFI is also facilitating the establishment of startups, entry or withdrawal of partners, and liquidation of companies; developing appropriate mechanisms for financial transactions, and cooperating with the Ministry of Finance to find digital solutions for tax procedures, in a way that suits the nature of startups.

During the meeting, an open discussion took place between the ICT Minister and entrepreneurs and startups founders. They discussed several topics related to the entrepreneurship and startup ecosystem.

In response to an inquiry about facilitating the procedures for importing electronic components, Talaat underlined that the electronic design sector is one of the strategic sectors. He said that the Knowledge City in the New Administrative Capital will include a building for hosting companies specializing in that field and a bank for such components to be used by companies inside the building.

He added that the building is equipped with ultra-modern labs that companies can use. Talaat also pointed out that ITIDA is preparing a whitelist of companies specializing in this field. The list is updated every quarter year and sent to the National Telecom Regulatory Authority (NTRA) to facilitate the procedures for importing such components.

On the possibility of the government investing in startups, the ICT Minister underlined that the role of the public sector is governance and facilitation, and the role of the private sector is investment.

Entrepreneurs called for leveraging ideas of startups and setting up networking forums with ministries. Talaat suggested that ITIDA hosts a working group that brings together the government, startups and experts to exchange views on proposed topics. He emphasized that all state sectors are keen on supporting startups.

The participating entrepreneurs commended MCIT efforts in supporting startups through Creativa Innovation Hubs and the Ministry’s keenness to contract with major global tech incubators.

The “Startup Day” event was attended by the Assistant ICT Minister for Strategy and Implementation Sherine El-Guindy, the Advisor to the ICT Minister for Technology Innovation, Electronics Industry and Training Hossam Osman, officials from MCIT, and executives of IT companies.