Promotion of Small and Medium Enterprises

Project description

Title: Promotion of Small and Medium Enterprises (PSME)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Egypt
Lead executing agency: Ministry of Trade and Industry (MTI)
Overall term: 2015 to 2020

Context
Even though several years have passed since the upheavals began in the Arab world (2011), Egypt remains in economic crisis. High unemployment, precarious jobs and underemployment are among the most pressing political and socio-economic problems.

If Egypt is to improve its international competitiveness, and generate new and better jobs, its economy must focus more sharply on efficiency and quality rather than relying on the use of highly subsidised raw materials and cheap labour. There is currently little technology transfer, and established companies, particularly small and medium-sized enterprises, have limited capacity for innovation. Their access to professional consulting and implementation services is insufficient.

At the same time, since the political upheavals there has been initiative growing interest in entrepreneurship. However, although business start-up owners are often highly innovative owners, they still have to contend with a state and private-sector support system that is unconsolidated and largely inadequate. State processes for setting up new companies, particularly those with innovative business models, are cumbersome and lack transparency.

Objective
The conditions for micro, small and medium-sized enterprises in the processing industry, as well as their suppliers, have improved.

Approach
To promote employment through sustainable economic development in Egypt, the programme is targeting the demand side of the labour market, encouraging the creation of new and better jobs for women and men. To achieve this, it works with a broad spectrum of stakeholders.

The programme supports the Ministry of Trade and Industry in focusing its industrial policy on promoting business innovation and boosting employment. Selected employees at the Ministry and downstream institutions are being trained in methods of promoting modern innovation and employment. The programme also provides targeted advice on specific aspects such as how to record the effects on employment, improve the quality of working conditions, and incorporating small and medium-sized enterprises into industrial zones.

Those benefiting from this approach include the various private and public innovation and start-up centres, which, with support from the programme, are increasing the range and quality of their services. The programme aims to bridge gaps in the promotion of innovative business ideas by providing suitable service offerings. One focus is on cooperation with incubators and start-up accelerators – the institutions that provide support for new businesses. The programme was expanded in early 2017 to include the implementation of successful activities and formats from the Responsible and Inclusive Business Hub (RIBH) that apply to Egypt. Broad-based business models that include disadvantaged population groups are increasingly being considered.

Access to professional, industry-based services contributes to boosting the innovative capacity of small and medium-sized companies, and promotes their growth by increasing competitiveness. For this reason, the programme is supporting the development of a services marketplace in a local institution with regional branches, which provides enterprises with central access to business-oriented solutions. In addition, selected Ministry of Trade and Industry technology and innovation centres are being supported in developing new services and offering existing services in a target-group-oriented and effective manner.

The consultancy GOPA is supporting project implementation.

Results

In November 2016, the Egyptian Industrial Development Strategy was presented to the public. Developed with support from the project, its key features have been included in the Ministry of Trade and Industry’s strategy for 2020. During the course of 2017, initial measures will be implemented by the authorities that report to the Ministry of Trade and Industry.

Through the creation of a ‘road map’ of service providers and start-up centres established and potential young entrepreneurs now have access to extensive information regarding support services. Forty of them have so far completed incubation programmes to prepare them for the marketplace. Competitions, service exhibitions and discussion events have enabled more than 500 (potential) owners of business start-ups to make informed decisions on business planning and finance.

Contact

Markus Donath
markus.donath@giz.de