The Software Industry in Egypt as a Potential Contributor to Economic Growth

Background

Although computing started in Egypt in the 1960’s, it was only in 1985 that the active role played by the government caused a change in the way information technology was perceived as a vehicle for socioeconomic development and a tool to improve the decision making process (Kamel, 1999). This change was accelerated by the continuous development of new tools and techniques that had direct and concrete effects on socioeconomic development. Furthermore and after the establishment of a ministry for communications and information technology, Egypt’s information society initiative (EISI) was launched in 2001 to provide a broad perspective on the strategic plan for information and communication technology diffusion in Egypt (Kamel, 2005). Therefore, it is perceived that the way developing countries will manage the computer driven process of change will influence whether its socioeconomic development goals will be promptly achieved. This will be bound to the continuous ability to invest in emerging technologies, the provision of skilled human resources and the completion of a state-of-the-art information and communication technology infrastructure. Many researchers have identified information technology as the combination of information, computing and communication technologies that through convergence could help the development process (The American Chamber of Commerce in Egypt, 2001).

Today, with the evolution and diffusion of the Internet, the integration of these technology elements is invaluable to societies around the world and strongly contributing to globalization. Moreover, newly evolving economies in the 21^st century are mainly dependent on hardware to process information; communication that acquire and distribute information and software which helps manage the whole process. The importance of information technology has been greatly emphasized in most developing countries in a deliberate effort to ensure that they do not lag behind, with an emphasis on localization and adaptation to local community needs. In most developing nations, the government has played the most important role in the diffusion of information technology being the largest user of computers (Moussa & Schware, 1992) and through its policies, laws, and regulations it still exerts the largest influence on the diffusion of information technology throughout different organizations (Nidumolu & Goodman, 1993). Such concept has gradually started to change throughout the last decade through massive deregulation of the information and communication technology sector with a focus on telecommunications. For example, in the case of Egypt, the government used to be the primary user of information technology with an accumulated market share of 25% (Ministry of Communications and Information Technology, 2006). However, recently increasing use of information and communication technology has been greatly felt in the banking, health, employment, trade, and local administration and education sectors among others (CIT Egypt, 2006).