Proud of Egypt’s history and ready to reshape its future, a new generation of dynamic Egyptian entrepreneurs are leading the change in their nation through innovation and smart developments
Acutely aware of global trends and with a far-sighted view of how Egypt can be a part of pioneering sustainable development, the country’s young crop of new business leaders represent the energy and drive that are inspiring confidence in the republic and drawing global investors in their droves.
Egyptian entrepreneur, rights activist and CEO of the Nebny Foundation, Jawad Nabulsi, headed the 2015 Arabian Business Power List, a guide to world’s 100 most influential young Arabs under 40. In total, 10 Egyptians made it onto the list and are involved in industries such as culture, media, construction, finance, entertainment and tourism.
“I think it is an exciting time for the country: there are a lot of changes and there is an ambitious government,” says Mohamed Kamel, CEO of the Egyptian Resort Company (ERC), a leading master developer and manager of fully integrated resort communities. “We can see this in the large-scale investments – for example in the Suez Canal, and ambitious investments in energy and infrastructure. In energy, for example, you can see for the first time a balanced relationship between traditional and renewable forms of energy. Government spending on infrastructure investments, including new roads and power stations, will help fuel economic growth until consumption and investment pick up. In tourism, vacation second homes and other hospitality development returns are currently volatile, but long term promise high returns. As a developer selling land, we are interested in macro issues that drive investment decisions, and we are seeing increased activity in this sector for the first time since the events in January 2011. Developers are currently keen on investing in hospitality-based projects because they see a positive five to seven-year cycle for the sector and for the entire economy on the horizon.”
Egypt’s potential was showcased at the three-day Egypt Economic Development Conference (EEDC) in Sharm el-Sheikh on March 13, 2015, with numerous landmark deals made. Palm Hills Developments, a leading real estate developer in Egypt and the one with the largest land bank, signed two of the 14 real estate Memorandums of Understanding (MoUs) at the EEDC. “Egypt has a lot to offer,” says Tarek Abdel-Rahman, Co-CEO of Palm Hills Developments. “It has two coasts offering great potential as a logistical hub and maritime services as well as expanding the tourism sector. From the financial perspective, the stock exchange is very solid, modern, and is second only to South Africa on the continent, and neck to neck with the UAE.”
Mr Abdel-Rahmen singles out various competitive advantages Egypt has to offer: “The obvious one is that it has a very large local market of 90 million people and growing 2% yearly. Egypt is also the gateway to the African continent and offers the most qualified labor force, which combined with its geopolitical location, the Suez Canal expansion and tripartite free trade agreement makes the country the perfect bridge between three continents. Another aspect is the diversification of the economy especially compared with the Middle East.
“We need to improve Egypt’s investment perspective abroad. In the end it comes down the risk that investors are willing to assume. Egypt will remain an emerging economy and thus will have the according risks and returns. We need to remember that Egypt is not the only emerging market in the world, and international investors have dozens to choose from. For this reason we need to make sure that we offer the best investment climate possible to attract said investors.”
Initiatives such as the EEDC are part of communicating Egypt’s investment advantages to the world. At the conference, the energy industry stood out in particular, especially the solar and wind sectors. “There is a political change that is reforming the economy, and a consensus within the business community we need to unite,” comments Sherif Magdy El Gabaly, CEO of the renewables-focused platform E-nara, adding that the total energy sector needs around $100 billion in investments over the next seven years. “The decision from the government to remove the subsidies from the energy sector was one of the strongest decisions the government and the president have taken. This brought the opportunity of having new industries and capacities which made a more competitive market.”
One of the leading construction and real estate groups in the region is also looking to expand its portfolio of activities into the energy sector. Hassan Allam Sons, one of Egypt’s largest and best-known construction and property groups, has invested heavily in solar and renewable sources. The third-generation family business, which operates through two distinct and wholly owned subsidiaries, Hassan Allam Construction and Hassan Allam Properties, has been involved in the construction of Egypt for eight decades and has a significant share of the massive road-building effort in progress at the moment, including a 240km road connecting Cairo with the north coast. It is also responsible for various power plants and other civil engineering projects across the country.
The group’s venture into renewable energy was targeted by its management team, which has an average age of below 40 years old and shares the optimism prevalent in the country’s business community. “We have a lot of brilliant young entrepreneurs and we have a vibrant and positive scenario for the young, leading generation. Our company in the last six to seven years has changed dramatically in terms of the introduction of younger people,” says Amr Allan, CEO of Hassan Allam Construction. “The government has realized that the younger generation is more involved in politics and the construction of new projects. Also, nowadays you will find a much younger generation in governmental departments that you did not see before. This change is new to our culture, but I think is very positive.”
Also reflecting the changing business scene in the republic, increasing numbers of Egyptian women are going it alone and setting up their own businesses. Professor of Economics at Cairo University Alia El Mahdi told the BBC last year that the current rate of 11% of Egyptian entrepreneurs being women contrasts with just 3% only eight years ago. She attributes two key factors stimulating the rise: a lack of public sector jobs, and discrimination in the private sector job market. In fact, half of the Egyptian top 10 on the Arabian Business list of most powerful young Arabs are women.
This new charge of young Egyptian entrepreneurs is looking to tap such opportunities and connect the country’s assets with current and future global trends. In contrast with previous generations of business leaders, the emerging entrepreneurs are highly educated, often with overseas studies under their belts, and make full use of access to social and digital media and information.
“I think Egypt has traditionally been a ‘grey hair’ business,” adds Omar Bassiouny, co-founder and partner of law firm Matouk Bassiouny. “Fortunately in recent years this has been changing. For instance, if you look at all the economic advisors you will see that there is a strong presence of young and capable people. In my opinion, this is a fantastic process. These changes from the top are having a great echo downwards, to the different ministries and into the different governmental authorities. The main idea of the government is to make the youth have a more important role in the country’s economy and politics. I think this is a great opportunity for this new Egyptian generation that always wanted to form an important part of the decision makers but they never had the opportunities due to cultural facts. I think we have an obligation towards the challenges appearing today in Egypt. So we are hopeful that the government will continue supporting a much more active youth participation.”
Youthful business leaders targeting younger populations and markets fits hand in glove with identifying global trends and turning them into prime business opportunities in Egypt. An example of such can be seen in ERC’s attentions turning to rising interest in more physical and active elements in tourism. “We are seeing the trendy rise of what I like to call physically active tourism: we are becoming one of the most prominent destinations in the world for kite surfing, desert expeditions, climbing, and other active activities,” says CEO Mr. Kamel. “We are seeing a lot of new investment catering to this growing demographic of active tourists – a younger population, which is trying to have a fulfilling experience combined with a healthier lifestyle here in Egypt.”
Tapping such tendencies has helped make its flagship development, Sahl Hasheesh, a highly popular destination on the Red Sea. “Our main objective is to be at the forefront of this health-conscious young population, who want to be active during their vacation time,” says Mr. Kamel. “We are by no means the pioneers of the fully integrated resort concept. But we are very lucky with what we believe to be one of the most prime locations on the Red Sea and the longest stretches of uninterrupted swimming areas. The resort is also well protected from the strong winds of the region due to land elevations to the north and north west of the resort.”
The undeniable spirit of the nation’s youth “to make things better” in Egypt unequivocally came to a head in the uprisings of 2011 and 2013. Indeed it is said that this same hopeful spirit channeled so passionately by Egyptians during the Arab Spring has inspired this new wave of entrepreneurship evident in the county over recent times. Research by the Global Entrepreneurship Monitor shows that 2.2 million Egyptians have become owners of new businesses since 2011, a significant rise from the pre-rebellion period.
The launch of Egypt’s first ever RiseUp Summit in November 2013 – a forum for Egypt’s fast expanding start-up scene – is a direct response to burgeoning entrepreneurialism needing a space to be heard and to grow. The success of the first summit led to a follow-up a year later. The idea behind the 2014 event was to reflect the transformational nature of innovation, and specifically the changing nature of Egypt’s start-up culture, which in its nascent phases had been dominated by tech and mobile apps. More recently, as the country’s entrepreneurial community has grown, so has the diversity of interests and projects, especially as to how new innovations can help drive socio-economic development.
According to the organizers, “RiseUp 2014’s theme was technology as an enabler for industries. In other words, what tech can do for hardware, renewables, agribusiness, the financial sector, creative industries and many other verticals. For the first time in the ecosystem in Egypt, we clearly saw opportunities in areas other than mobile and web.”
The forum included around 2,000 start-up projects and more than 150 investors. It also highlighted that there is clearly something special about Egypt’s start-up scene – it showed that many of its players are interconnected, owing both to the budding industry’s small size and the fact that many of its stakeholders share similar motivations and goals.
The latest edition of the crowdsourced summit, RiseUp 2015, was the biggest so far and drew the attentions of Silicon Valley giants such as Microsoft, Google, LinkedIn, Facebook and Twitter, as well as the energy and raw talent of the region’s hottest rising innovators and entrepreneurs. It was held on December 12-13, 2015, under the banner ‘Quantum Leap – Middle East and Africa’s Top Entrepreneurship Event’ and attracted an estimated 4,700 attendees from 25 countries to the GrEEK Campus of the American University of Cairo (AUC) in the capital’s downtown district.
Egypt has begun to completely reinvent itself in the aftermath of revolution, and the entrepreneurial spirit that has taken root as a result is at the very essence of this continuing cultural shift.