Egypt eyes IT firm teaching help for offshoring

By Alexander Dziadosz

CAIRO (Reuters) - Egypt is seeking more support from firms such as IBM to improve technology teaching at its schools so it can expand an offshoring industry that could generate $10 billion a year by 2020, a senior official said.

Offshored operations, such as technical support and call centres, now bring in $1 billion a year for Egypt, which wants to win a bigger slice of the global business as shrinking populations and high costs in Europe encourage a shift abroad.

But despite some success, foreign investors often complain of a skills gap in Egypt and say they have to pay a premium to secure recruits with the right technical and language skills.

"If you look at Europe it is known demographically they have a shortage of availability of human capital at a certain point in time," Amin Khaireldin, strategy adviser to the Information Technology Industry Development Agency (ITIDA), told Reuters.

"Either you do offshoring-outsourcing services, or you import people. European countries do not want to import people."

Oracle, Microsoft and Stream Global Service established businesses in Egypt in the past five years, drawn partly by cheap labour, government incentives and relatively stable telecoms infrastructure.

Khaireldin said the target of generating $10 billion from offshoring by 2020 was still preliminary. "But the challenge the minister is asking me now (is) to design a programme for 10 billion, instead of a billion," he added.

To encourage this, ITIDA -- a Communications Ministry body set up to promote and nurture the offshoring industry -- started a $10-12 million a year programme in 2008 to teach university students English, Microsoft software and other skills.