EGYPT
ENTREPRENEURSHIP
STUDY
BUSINESS SWEDEN DUBAI, AUGUST 2015
PREAMBLE
POTENTIAL FOR SWEDISH–EGYPTIAN
COOPERATION ON ENTREPRENEURSHIP
INVENTING TOMORROW’S WORLD – CREATING JOBS FOR THE FUTURE
In 2015, the Swedish Embassy in Cairo, in collaboration with Business Sweden has started to work
on developing networks and contacts with decision and policy-makers, entrepreneurs and
academic institutions in Egypt to explore possibilities for enhanced Swedish-Egyptian cooperation
in the field of education, innovation and entrepreneurship, under the theme of “Inventing
Tomorrow’s World – Creating Jobs for the future”.
This report is carried out by Business Sweden on request by the Embassy of Sweden in Cairo, and
is built on literature review, interviews with academia, government officials, private business and
entrepreneurs in both Sweden and Egypt, following discussions initiated at a brainstorming
workshop, held 17 February 2015, at the Swedish Embassy in Cairo, in order to open discussions
with relevant stakeholders and partners in the field and in an attempt to get a better overview of the
needs, challenges and interest for joint action and cooperation. In addition, events such as Your
Middle East (28 April 2015) further served as inspirational source and exchange of experience by
various stakeholders approached and interviewed in the course of the analysis.
The report further explores potential for Swedish-Egyptian cooperation on innovation and
entrepreneurship, aiming at strengthening trade relations between the two countries. This
“Entrepreneurship Study” serves as recommendation on the implementation and execution of
various programs and activities, such as an Entrepreneurship Forum to be held in autumn 2015.
In general the following background topics have been in focus for discussions:
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Economic growth and job creation is on the top of Egypt’s political and economic agenda.
A large young and educated population is the country’s potentially most valuable resource
that could be a driving force for much-needed economic expansion, but it is also potentially
a risk factor, if not given opportunities to work. What are the main challenges? What
concrete recent policy initiatives have been taken by the Government and how effective
are they expected to be? What can realistically be achieved in the coming years?
Could Swedish experiences in the field of entrepreneurship, competitiveness and SMEs be
a valuable source of inspiration? Who are the entrepreneurs in Sweden and Egypt? Which
industries are the most entrepreneurial? In which areas would it be most interesting to
explore possible cooperation, business promotion and exchange?
How to gain a more comprehensive overview of challenges and opportunities for smaller
enterprises in Egypt, as well as additional insights in the state of Egyptian market in
general and to identify needs and opportunities?
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Background
Economic growth and job creation is on the top of Egypt’s political and economic agenda. A large
young and educated population is the country’s potentially most valuable resource that could be a
driving force for a much-needed economic expansion, but it is also potentially a risk factor, if not
given the right opportunities to work. Following the 2011 revolution, Egyptians displayed an
increased interest in starting their own businesses, in 2012, 3.6 million Egyptians were stage
entrepreneurially active (Hattab, GEM Egypt 2012 Report, 2013). While Egyptians are embracing
the culture of entrepreneurship more and more since 2011, studies show that the area still faces
numerous challenges:
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Entrepreneurial skills as part of the education system remains untapped
Access to finance and microloans is very scarce and challenging
The legal frameworks are hindering the establishment of new/small companies
Entrepreneurial projects in Egypt are only directed to the local market
The rate of female entrepreneurs in Egypt is very low
Egypt’s economic performance is rated as weak in the World Economic Forum’s Global
Competitiveness Report, but there seems to be a growing interest and efforts to improve the
business climate. The potential for improvement is significant and Swedish experiences in the field
of entrepreneurship, competitiveness and SMEs could be a valuable source of inspiration. Sharing
Swedish experiences could be used as a platform for further improving the image of Sweden in
Egypt and open a door for new Swedish companies to a market of nearly 90 million people, a
market with an increasing demand. Contributing to increased growth and decreased youth
unemployment would additionally provide elements of stability in the European neighbourhood.
Against this background and based on discussions with the Embassy of Sweden in Cairo, the
following study was conducted by Business Sweden in order to gain a more comprehensive
overview of challenges and opportunities for small and medium enterprises in Egypt, as well as
additional insights on the state of Egyptian market in general, and to identify needs and
opportunities. The ambition is to create conditions for further strengthening of trade relations
between Sweden and Egypt, as well as of Swedish position in the Egyptian market, which in turn
would possibly increase the Swedish export and create new job opportunities also in
Sweden. Hence the Swedish-Egyptian cooperation on Innovation and Entrepreneurship will aim to:
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Establish a link and facilitate dialogue between Egyptian and Swedish entrepreneurs with
the aim to find common grounds for future business collaboration.
Provide support and strengthen the entrepreneurship sector in Egypt, through exchange of
experiences and knowledge transfer.
Contribute to enhancement of entrepreneurial skills of young Egyptians, with special focus
on innovative thinking and techniques.
The idea is to arrange a forum in November 2015, around various themes and specific topics
identified throughout this analysis, including discussions on how to grow a business, the impact of
globalization, and focus on products and services setting a sustainable urban lifestyle. Hence, the
forum would incorporate both an “exchange of ideas” element and a business element, including
panel discussions, creative workshops and networking as well as business related matchmaking.
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Whilst targeting Egyptian decision and policy-makers as well as emerging entrepreneurs,
especially in the fields of design, technology, communication etc., the Embassy of Sweden in Cairo
and Business Sweden also aim to bring together future Egyptian entrepreneurs with an established
business idea, with Swedish founders of small enterprises, hence creating a platform for Egyptian
and Swedish entrepreneurs to meet and exchange experiences, present business ideas and
network with other entrepreneurs, decision-makers and financing parties. Organizations such as
the Swedish Institute (SI), the Swedish International Development Cooperation (Sida), capital and
funding organizations from Sweden should also be involved.
Building on Egypt’s needs and interests and on the Swedish experiences that can be of interest,
the upcoming forum could, among other things, provide an opportunity for decision makers to
discuss administrative barriers in Egypt that hinder the progress of entrepreneurship and at the
same time be introduced to Sweden’s recent reforms to encourage the development of this area.
Both Egyptian and Swedish entrepreneurs will be given the opportunity to discuss innovative
products and services and exchange experiences, in order to develop ideas, expand business, and
get inspired by successful Swedish international brands that began as start-ups, but also by large
Swedish companies established in Egypt who focus on entrepreneurship and innovation.
Given that Sweden has a sound entrepreneurial culture, and Swedish experiences in the field of
entrepreneurship could be a valuable source of inspiration for Egypt, the Embassy of Sweden in
Cairo and Business Sweden have looked at what Sweden could offer and assist with in Egypt’s
process of transforming its entrepreneurial potential:
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Competitiveness and internationalization: Many Swedish companies have start-up
roots, but succeeded in becoming global brands within few years and are competing in the
international market like Spotify, Skype and SoundCloud.
Innovation: Skills and innovation is an area in which Sweden remains well ahead other
EU countries, with around 47% of Swedish SMEs performing exceedingly well in
introducing product or process innovations, in-house innovation and using e-commerce
(Source: The Small Business Act for Europe 2014 factsheet).
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Encouraging women entrepreneurs: Sweden is ranked the 3 worldwide in the 2014
Gender Global Entrepreneurship and Development Index and the country has a great
experience in empowering women entrepreneurs. In addition, Sweden has a number of
training programs supporting female entrepreneurs that could be of benefit for Egypt.
Reforms and policy development: The Swedish Government is ensuring a solid
infrastructure that boosts entrepreneurial spirits, with a number of measures being adopted
the last few years including mentorship program for young entrepreneurs, free advice
consultancy scheme, and simplified VAT payments and reporting rules (Source: The Small
Business Act for Europe 2014 factsheet).
Education: Sweden has around 20 Master Programs on Entrepreneurship in different
Swedish Universities and available in English for foreign students.
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Table of Contents
1
2
3
Definition of Entrepreneurship ....................................................................................5
Status of Entrepreneurship Ecosystem today .............................................................5
Challenges of entrepreneurship in Egypt and the respective Swedish model..............6
3.1
Education ............................................................................................................6
3.2
Access to Finance ...............................................................................................9
3.3
Legal Regulatory Framework .............................................................................11
3.4
Cultural Mindset & Social Norms .......................................................................12
3.5
Access to business knowledge, growth and internationalization ........................13
4 Sweden: One of the Most Innovative Countries Globally ..........................................13
5 Egypt’s Ecommerce Potential vs. Sweden’s Established Market ..............................14
6 Company forms: Egypt and Sweden .........................................................................14
7 Women and Entrepreneurship in Egypt and Sweden respectively ............................16
8 Conclusions and Recommendations to further develop Entrepreneurship in Egypt ..18
Bibliography .....................................................................................................................22
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1
Definition of Entrepreneurship
For the scope of this study, Business Sweden has chosen to focus on and examine business
entrepreneurship whereby individuals (entrepreneurs) go through the process of starting a
business or setting up a company. Global Entrepreneurship Monitor defines entrepreneurship as
“any attempt at new business or new venture creation, such as self-employment, a new business
organization, or the expansion of an existing business, by an individual, a team of individuals, or an
established business”. Entrepreneurship is further defined as an activity that “involves the
discovery, evaluation and exploitation of opportunities to introduce new goods and services and
ways of organizing, markets, processes, and raw material through efforts that previously had not
existed” (Hattab, GEM Egypt 2012 Report, 2013).
Even though this report will not cover Social Entrepreneurship, it is important to shed light on this
notion given its importance in today’s world, its positive impact on societies, and its apparent
growth in Egypt (an area that would be interesting to study more closely). Social entrepreneurship
is embarking upon a business venture in order to find solutions for social problems. Social
entrepreneurs are people who find innovative solutions to society’s most persistent social
problems.
2
Status of Entrepreneurship Ecosystem
In order to further explore and tap into the subject of entrepreneurship, it is essential to have a
deeper look into the various levels of entrepreneurship and entrepreneurial culture, comparing the
Egyptian and Swedish systems respectively. It is widely agreed, that Entrepreneurship is key in the
advancement of a developing country such as Egypt. A demographic analysis of the Egyptian
population shows that 29% of Egyptians were between the ages of 15 and 29 years in the year
2013 (Policy Brief 003, 2013); a huge force that can act as a stimulus to the country’s development
if it’s used in the right way. Egypt and Egyptians must keep up with creating job opportunities for its
rapidly growing population; enhancing entrepreneurship is a case in point. More youth are looking
at entrepreneurship for employment; according to Handoussa and Ramadan, “Egypt’s young
population gives it a strong entrepreneurial advantage”. Egypt has a considerably large market the largest in the MENA region, thus there is ample room for growth and innovation. Additionally
Egypt faces a multitude of challenges that can be overcome with numerous entrepreneurial ideas.
The ICT sector shows remarkable potential in the field of entrepreneurship, such as the
entrepreneurs behind Bey2ollak, the live traffic update application that has Vodafone Egypt as a
partner today and is used by one million Egyptians to guide them to the less jammed routes; or
DrBridge - a healthcare online eco-system that bridges and connects clinic practice in order to
deliver better medical quality and engage patients in their cases. However, as it stands now, more
than 65% of entrepreneurial projects are concentrated in retail, trade, hotels, restaurants and
manufacturing, while the technology and information sectors are less than 2% (GEMS, 2013).
The motivation of youth who have actually started a business has mostly been self-employment.
Approximately a third of youth entrepreneurs opened a business because they could not find wage
work, indicating that high unemployment and difficult labour-market conditions do push some youth
into entrepreneurship. Moreover, more than half of male entrepreneurs cited greater independence,
compared with 36% of female entrepreneurs; and 9% of female entrepreneurs mentioned more
flexible hours, a reason that was also more commonly given among female youth who said they
prefer self-employment. This suggests that owning a business may be an attractive way for some
female youth to balance work and family responsibilities (Sieverding, 2012). From the above, we
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can conclude that entrepreneurship in Egypt is not only triggered by people’s innovative ideas,
creative minds, and sound business cases, but also as a replacement for employment and in
search for more flexibility and balance.
However, there is a stressing risk and challenge of the so called ‘Lifecycle’ of every project, fearing
to not be able to take the idea to its next step, and the entrepreneurial spirit dying out when
business reality kicks in. It is organizations like Endeavor Egypt, that leverage on startup activity
and university incubator efforts, to being commercially driven, even after graduation, following
business plan, and reaching an upstream in the pyramid. As a non-profit organization, Endeavor in
Egypt is part of a global network of 21+ countries. Its main aim is to develop the economy locally
through finding, selecting, supporting and servicing high-impact mature entrepreneurs with strong
potential for growth and job creation. The organization relies heavily on a wide network of mentors
from the professional, academic and entrepreneurship world, who dedicate their time and
knowledge to help entrepreneurs grow; it is important to note that Swedish companies and
business professionals in Egypt are not active in this network today.
3
Challenges of Entrepreneurship in Egypt and the Respective Swedish model
A roundtable at the Embassy of Sweden in Cairo early 2015 and continued interviews carried out
by Business Sweden with relevant stakeholders have revealed a number of challenges that
entrepreneurs usually face in Egypt; that are highlighted in this chapter, whilst shedding light on
how the Swedish model has worked through it. Reoccurring challenges are: Education (level of
education at schools and entrepreneurship programmes at universities), access to finance, legal
regulatory framework, cultural mindset and social norms, growth and scaling up, difficulty in
reaching the market/internationalization as well as access to business information and knowledge.
3.1
Education
A major challenge in Egypt is the quality and reach of education, in general and particularly rural
and remote areas of the country, about 17.2 million are illiterate. Education influences and is
influenced by social and cultural factors aimed at encompassing both academic knowledge and
practical skills to prepare young people for responsible citizenship and the world of work. For
decades the domination of public sector and state owned enterprises resulted in a prevailing
culture of working for the less-demanding and secure public sector and the government was
responsible for placing every graduate of secondary schools or above into employment, either in
the civil service or in public sector enterprises. It has been widely believed that the decades of
public sector domination (since the 1952 revolution) have destroyed the entrepreneurial spirit within
the young generations in Egypt.
According to Hattab 2008, the education system in Egypt was assessed by national experts as
being very weak in this area, at all levels of schooling, unlike the case in many other countries
where the government has made entrepreneurship education a priority. Thus Egypt needs to
consider and encompass practical methodologies to allow for entrepreneurial skills acquisition its
young population. Based on the above, literature has been investigating means of improving the
entrepreneurial skills and enhancing Entrepreneurship Education (EPE) of youth in Egypt.
Entrepreneurship education aims at “fostering self-esteem and self-confidence by stimulating and
nurturing the talents and creativity of the individual [...] EPE is about creating an entrepreneurial
mindset/culture that fosters innovation, problem-solving and active citizenship” (Munther Masri,
April 2010). Studies show that EPE is important because it influences not only the level of
entrepreneurial activity but also the quality of the businesses started.
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Entrepreneurship is a key driver of economies in developing nations, and learning about
entrepreneurship is a lifelong process that must start from primary education in school, and
develop further into higher levels of education. Entrepreneurship education should not be confined
to university level, as it is very important to embed the entrepreneurship spirit in young students
and lay the foundation then continue building up on their existing knowledge until the final
university education years and also during adult (continuing) education. Learning about
entrepreneurship from a young age will result in developing the required toolkit including (but not
limited to) acquiring basic economic understanding, basic financial concepts, problem solving skills,
and an understanding about entrepreneurship and its contribution to the society.
Egypt is still lagging with regards to university incubators; there remains to be a lot of opportunities
in this area. The first and only university incubator to launch was AUC Venture Lab at the American
University in Cairo in 2013. AUC Venture Lab incubates early-stage and growth-stage startups that
are chosen through a selection process that judges the novelty of the idea, the team’s track record
and cohesion, scalability and potential for commercialization, as well as the team’s tenacity and
commitment to success. AUC Venture Lab offers workspace, funding, business trainings,
networking events, mentorship, and access to faculty members, students and facilities of the
American University in Cairo. Interestingly, in 2014 Sweden-based UBI-Index selected AUC V-Lab
among the top five most promising university incubators in Africa.
Apart from university incubators, a number of independent start-up incubators have been stepping
into the entrepreneurship scene in Egypt in the last few years with the main goal of bringing life to
innovative entrepreneurs, among the most prominent ones are: Flat6Labs, Delta Inspire, Start-up
Egypt, Tamkeen, Endeavour Egypt, Intilaaqah Egypt, Nahdet Masr and the government-run Ayady.
Sweden has a sound history of active entrepreneurship, whereby schools and universities both
offer entrepreneurship programmes to train and educate students on starting their own business. In
2009, the government presented a strategy for entrepreneurship education in schools, whereby
entrepreneurship should run like a silver thread though the entire education system. In addition, the
close ties between the schools and the Confederation of the Swedish Enterprise in combination
with school programs that are niched and focused on entrepreneurship has led to the creation of a
fostering culture when it comes to entrepreneurship. It is widely understood that, entrepreneurs
close the gap between an innovation and the market. Hence it needs to be ensured that
innovations are managed in a way that enables financing and further development to the market.
This involves creative new business models as well as identifying market opportunities, as the most
obvious kind of entrepreneurship is founding a new business. Sweden offers various programs and
course to foster entrepreneurship and business development at many of its renowned Business
Schools; with its professors, lecturers and success cases creating a substantial base for potential
knowledge and experience exchange for Egyptian entrepreneurs and Egyptian programs. This
analysis will highlight only a few out of the many schools and programs available. The following
examples have been chosen according to national and international success cases and as a
showcase to give insights on the educational landscape in Sweden. Whilst there are a number of
schools offering a variety of programs, the below ought to be of great importance due to their
recognizable work.
The Stockholm School of Entrepreneurship (SSES) is collaboration between Stockholm’s top five
schools: KTH, Stockholm School of Economics, Karolinska Institutet, Stockholm University,
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Konstfack - University College of Arts, Crafts and Design. Together the five schools are devoted to
offering its students education, training and inspiration in applied entrepreneurship. SSES is
structured as a non-profit association with the acting rectors of the member universities as eligible
members. The board of SSES represents the member universities and industry representatives.
This model creates a strong regional and personal commitment to the very idea of SSES. It also
provides a sustainable and efficient platform for high-level academic decision-making. SSES is also
represented by a dedicated team of some 60 faculty and staff members. And in excess of 200
guest speakers, mentors and coaches take part in our education program every year. A number of
collaborative and academic partners from the global network, and it can be noted that a first
1
collaboration program has been formed with Stellenbosch University in South Africa.
Situated in Gothenburg, the Chalmers School of Entrepreneurship was founded in 1997 and today
is an integrated part of Chalmers’ strategy - an entrepreneurial university that takes responsibility
for sustainable growth through innovation and entrepreneurship. The school was the highest
ranked advanced entrepreneurship program by the Swedish government in 2009. With regards to
developing new companies, Chalmers School of Entrepreneurship increases both the quantity and
quality of an early-stage deal flow stemming from research and innovation. Whilst the responsibility
of commercialization is spread beyond the shoulders of one individual – typically the researcher or
inventor – to a team of venture creators, in a process that emphasizes sophisticated
entrepreneurial learning; it is the educational program itself that adds entrepreneurial drive and
commercializes technology otherwise entrepreneurs will be trapped in the idea or research stage.
At Umeå School of Business and Economics, Entrepreneurship is positioned as a multidisciplinary
field of research, attracting researchers with different backgrounds and different theoretical
frameworks. Research in the field of entrepreneurship and small business development is one of
the oldest at the school. In fact, Swedish research on entrepreneurship and SMEs originated in
Umeå. The main research areas within the section are: Innovation, Network Dynamics and
Internationalization, Entrepreneurial Processes and Competence Development as well as
Sustainable Economic Organization. Researchers have also built up a long-standing collaboration
with University of Dar es Salaam Business School funded by Sida. The collaboration with Sida and
University of Dar es Salaam started with a PhD. sandwich program and so far the program have
graduated 17 PhDs and generated six different postdoctoral projects in the Tanzanian context.
Jönköping International Business School (JIBS) offers courses in conceptualizing
entrepreneurship, taking it back to the basics of understanding and defining the field of interest as
such, as entrepreneurship takes place in various contexts, being embedded socially, culturally,
historically as well as politically.
Lund University, one of northern Europe’s oldest and most renowned universities has three
incubators with different emphases that all offer access to inspiring environments for both current
and recent graduates. VentureLab is a student incubator that supports students and recent
graduates who are thinking about starting their own company. As well as offering free office space
1
Collaborative partners: Connect Östra Sverige, IFS, QuestBack, SUP46, TiE Nordic, Venture Cup
Academic Partners: Aalto University, Carlson School of Management (UMN), Cornell University, Institute of Design Stanford
University, Darden School of Business, Hong Kong Design Institute, Hong Kong Polytech University, National Institute of
Design, India, National University of Singapore, Paris-est Design School, Parsons The New School for Design, San Diego
State University, Stellenbosch University, University College London, University of California, Berkeley, University of Texas
at Austin
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for a year to student companies, VentureLab also provides advice and lectures. Ideon Innovation is
another incubator program that offers an internationally recognized business incubator process that
helps entrepreneurs to establish high-quality, growth-orientated companies in a timely manner.
Moreover, Lund University also offers Lund Life Science Incubator that helps start-up companies in
life science to develop and commercialize their ideas. LLSI offers an incubator environment with
well-equipped wet labs and cell cultivation labs, as well as offices and meeting rooms.
Besides basic educational programs and institutions, Sweden also encourages interest in
entrepreneurship and starting a business at an early age. One example is Junior Achievement
(Ung Företagsamhet), a Swedish organization that specifically works to promote entrepreneurship
among young students and teenagers. It has an educational program that starts from grade two all
the way through high school. The students are encouraged to start and run a business/company for
one year during their final years in high school whereby the company formed takes on a unique
legal form that is specific and only allowed for students and approved by the Swedish Tax Agency.
Remarkably, the above is considered to be part of their school curriculum that they receive credit
points for. Studies have shown that students who participate in this program have a 20% higher
chance of running a successful business, often earn more money in their future careers by up to a
month’s salary more, and have a much lower chance of being unemployed. (Source: Josefin
Bengtsson, Regional Manager, Ung Företagsamhet).
There is also the non-profit association Snilleblixtarna (‘flashes of genius’), which is geared to
school children from preschool to fifth grade. The goal is to encourage children’s interest in
technology, natural sciences and entrepreneurship. Snilleblixtarna provides teachers and
educators with tools and a working model to stimulate children’s curiosity, desire to learn and ability
to think critically.
ESBRI - Entrepreneurship and Small Business Research Institute - an independent research
institute located in Stockholm that was founded in 1996 through an endowment from Mr. Leif
Lundblad, a successful Swedish inventor and entrepreneur. At the same time, a professorship in
entrepreneurship and small business was created at the School of Business, Stockholm University.
This is the first Swedish chair in entrepreneurship created through an endowment from an
entrepreneur. Björn Bjerke was "Leif Lundblad Chair in Entrepreneurship and Small Business
Studies" 1999-2002. ESBRI was formally inaugurated by His Majesty Carl XVI Gustaf in June
1997. In conjunction with the inauguration, a symposium was held. The theme was "The Creation
of Growth and the Creation of New Jobs".
3.2
Access to Finance
Access to finance is perhaps one of the most recurring issues when discussing the challenges of
entrepreneurship in Egypt. It “has for long been one of the main problems that nascent as well as
established entrepreneurs faced in Egypt” (Adly, 2014). During the underlying research, the
following topics were of special focus to respondents: few financing options, high investment risk,
poor structure of investment climate, etc. At the outset, it is important to mention and acknowledge
the work of the Social Fund for Development, which is a governmental body mandated to work on
developing small and micro-enterprises, and planning, coordinating and promoting their expansion,
and assisting in their financing and other services, in cooperation with governmental authorities.
However, the SFD is mainly focusing on very small and micro sized start-ups that are very
traditional and lacking the aspect of innovation. This implicates that there is a financing gap for
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small and medium sized start-ups, given that the governmental body SFD, is primarily catering to
the smaller sized companies. Research and interviews have both confirmed the above challenge
that the entrepreneurship society refers to as the ‘missing middle’ which is financing loans ranging
between 2 - 10 million Egyptian pounds.
According to Adly, 2014, restrained access to finance has been reported to be the third top barrier
to growth. Around 58% of the entrepreneurs that Adly study has interviewed stated that access to
finance was a major problem. The available “formal” sources of finance for entrepreneurs in Egypt
are typically bank loans, special funds targeting MSMEs and young entrepreneurs, venture capital;
though most entrepreneurs depend on self-financing options since the above is not always feasible
and accessible. Entrepreneurs have reported that the main sources of self-financing are business
profits, private savings, and credit from family and friends; “The principal institutional channels that
should provide debt or equity do not seem to function to the vast majority of entrepreneurs and the
broader base of the Egyptian private sector” (Adly, April 2014). This study revealed that while 37%
of entrepreneurs interviewed applied for a bank loan, only 42% reported the actual receipt of credit.
It is also important to mention that those who did not apply for bank loans could not afford the high
interest rates, could not meet the required collateral and guarantees, or believed the procedures
were complex, costly and time-consuming. There are also some misunderstandings on the part of
youth as to how business financing works, which may stop them from applying for the credit
facilities that are provided by different organizations. Moreover, the banks viewed “business ideas”
of nascent, micro and small enterprises to be too risky to be financed. Based on the above it is
reasonable to believe that banks hardly extend any credit at the start-up phase and entrepreneurs
have limited access to funding for their start-ups thus they tend to depend on themselves, their
families and personal networks to secure their start-up capital. It is important to note that the above
mentioned credit facilities and active institutions do not always reach the whole of Egypt. If we look
at rural areas such as Upper Egypt, the scene is a lot different. Those areas are much less
privileged than the Cairo, Alexandria and major cities in Egypt. Youth do not have the financial
resources to start a business, and micro financing loans though well-known come along with a
variety of challenges, they are not wide spread and are limited to few banks, they are poorly
understood by some youth, they are very humble loans in terms of loan amounts, the loan process
is too complex, and finally the risk involved while taking a loan (Sieverding, 2012).
Having mentioned the above, it is important to shed light on the non-traditional sources of finance
such as venture capital and angel investors. According to entrepreneurs actively working in the
Egyptian market, venture capitals and angel investors are very confined to high-tech sectors,
leaving behind traditional sectors such as tourism, industry, and agriculture even though they are
all among the main sources of income in the Egyptian economy. Besides, the concept under which
they operate is still not widely known and understood by the many people, which means that their
reach is quite limited. It can be concluded that non-traditional finance remains limited to a few
sectors and with little impact on the overall picture in Egypt. With that in mind, the future potential of
those institutions is crucial given the problems with the banking sector.
In Sweden most small and newly established companies don’t really rely on external capital, they
instead mostly finance their own endeavors. Access to finance for the ones that need it can be
quite challenging even in Sweden. More stringent requirements for collateral and higher interest
rates from the banks are seen as major challenges by most entrepreneurs. Government owned
ALMI is seen as an alternative source for financing. They provide financing and advice when banks
and other institutions aren’t willing to take the risk. The upside is that no collateral is required from
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the entrepreneur and they are not personally liable in the case of bankruptcy. The downside is that
they often charge a higher interest rate for the premium risk that they are taking (Thomas Orrung,
Regional Manager, ALMI).
The above is in line with a proposal brought forward by the Swedish Ministry of Innovation in June
2015 (found below), requesting more measures to be taken and more funds to be allocated for
financing small and medium entrepreneurs. “In general, the Swedish financial markets are well
developed by international comparison. However, there is a need for stronger support in very early
stages of the development of new or innovative enterprises. There is also a lack of capital when
financing the interval SEK 5–50 million. Furthermore, measures should be taken to enhance the
availability of loans for small and medium-sized enterprises in general. A new public state-owned
fund should be set up in order to co-invest with private capital in venture capital funds. The fund will
also act as the holding company in a new investment structure.” The main objective of the new
fund is to co-finance early stage venture capital investments in innovative Swedish enterprises with
high-growth potential. Another objective is to contribute to the strengthening of the overall financial
ecosystem in Sweden. A limited company called Fondinvest AB, with a total capital of SEK 3 billion
as a holding fund, comprising several funds. Up to six new funds will be set up with total capital of
SEK 500–1 000 million. Furthermore, two EU-financed funds will be incorporated into the new
structure. The inquiry also proposes a demonstrator fund, capitalized with SEK 1.5 billion, for
investments in production-scale facilities. Fondinvest AB will also administer a loan guarantee
system, aimed at securing access of small enterprises to financing. Finally, the inquiry proposes
measures to enhance the support for developing innovative enterprises. In total, SEK 340 million in
increased funding is proposed for several measures to enhance loans and grants for innovation. In
accordance with the proposal, the implementation of the new investment structure should be
conducted in 2016 so that the new fund, Fondinvest AB, can be in full operation at the beginning of
2017. The implementation is recommended to be prepared within a special committee as a
coordinating party. (SOU, June 2015)
3.3
Legal Regulatory Framework
Processes and procedures of registrations and of starting up businesses in Egypt are not the most
simple. Complicated procedures and legal frameworks have typically been among the main
challenges and barriers for entrepreneurs to enter the Egyptian market and for the already existing
informal business to formalize their being. In 2004, with the government emphasis on attracting
investments it inaugurated the one stop shop at the General Authority for Investment and Free
Zones (which is a governmental bureau meant to encompass all necessary approvals to facilitate a
fast start-up of companies in Egypt; and gathering representatives from 47 ministries and
government agencies authorized to provide all necessary licenses and approvals required for the
establishment of businesses). However, even with the one stop shop in place, the Doing Business
Report (by the World Bank Group) ranked Egypt 113 in 2014 and 112 in 2015 on a pool of 189
countries. Government bureaucracy and long complex procedures make it hard for people to start
their own businesses leaving them to either continue working in the informal way, or weakens their
entrepreneurial drive and interest to start a business. Corruption amongst governmental
organizations also creates barriers to access of information and ineffective antitrust laws and
regulations do not stop major companies from keeping out new and small competition. Added to
that is that the cost of closing a business is also very high for all entrepreneurs and the process is
very lengthy, and can go up to one or two years.
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In Sweden, procedures for starting up companies are simple and straightforward. The legal
regulatory framework is clear and organizations that help entrepreneurs to better understand about
starting up companies do exist. One example is the Swedish Jobs and Society Foundation; which
is a semi-municipality funded organization that works to stimulate entrepreneurship and helps the
creation of new companies. As the first point of contact for people that want to start a business, a
three step approach is being applied: (Birgit Båvner, Regional Manager, Nyföretagarcentrum)
Step 1 - “How to step up a company”: They offer a 5 days course free of charge. They help
individuals with everything from writing a business plan, to bookkeeping, to advice on different
company structures, to declaring taxes.
Step 2 - Individual advice-sessions: Once a person has been given the basic tools to start
his/her own company, he is offered personalized advice session, where he can schedule a free
advice session with a professional that can guide him towards stability.
Step 3 - Mentorship: Once the person has come further in his establishment of the company, they
offer him a mentorship program, where they match him with a personal mentor (usually a person
that has years of experience from starting a company). This mentor guides him/her and helps them
make as much of an informed decision in the company’s future as possible. This mentorship
program lasts for 1 year, but can be extended depending on the specific needs
Statistics have shown that more than 23 000 people seeking for advice on how to start a company
approached the Swedish Jobs and Society Foundation in 2013. Among those more than 9000
started a company. Less than 1% of all assisted companies went into bankruptcy after 3 years,
81% of all companies were engaged in active business after 3 years, and 89% of companies that
went through The Swedish Jobs and Society Foundation’s mentorship program were engaged in
active business after 3 years and none went into bankruptcy.
3.4
Cultural Mindset & Social Norms
Culture and social norms are strong driving forces in Egypt. Traditionally, it has always been the
most common that students graduate to be employed by the government because it was the most
‘guaranteed and stable’ job the market could offer, nonetheless, a few decades ago mindsets have
changed into accepting working for the private sector for what it has to offer (such as higher wages
and benefits). Starting one’s own business, on the other side, is not always a socially and culturally
accepted idea. This resistance into starting one’s own business is backed up by the argument of
having a stable job and receiving a stable income each month. In addition, every Egyptian parent
strives to push his kids into being a doctor, an engineer, a banker or to be employed by a wellknown reputable (sometimes multinational) organization. Moreover, youth often regard
entrepreneurship (or starting one’s own company) as a supplement to a regular job (a side
business), or as a retirement plan.
Straying from the above path and quitting one’s job to start private business is not a very popular
idea. A case in point is The Bakery Shop’s experience (The Bakery Shop is a concept fresh local
bakery). When partners were discussing the idea with their families, they were faced by strong
resistance and criticism upon explaining their business idea and their need to move away from their
careers in promising multinational companies in order to pursue their business venture. Another
example is Ahmed Abdoun, the sports entrepreneur, who has faced similar challenges and
disapprovals from family members when deciding to quit his sales and marketing management role
in a multinational company for starting off his business in the sports industry. He was pressured to
remain in his job for around one year until his business ‘picked up’, and it was ‘safe’ to leave his
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job. This is also true in light of the high unemployment rate that is prevalent in Egypt; people tend
to be reluctant to leave their stable jobs in fear of not finding another job in case their business
fails.
Having said the above, it is key to highlight that in order to achieve the desired change in the
Egyptian culture towards entrepreneurship, national cultural awareness/ marketing campaigns and
programs are required to enlighten people on the benefits and importance of entrepreneurship.
3.5
Access to Business Knowledge, Growth and Internationalization
An enabling environment for entrepreneurship must encompass education, practical training, skills
development and access to information. Egyptian entrepreneurs at large do not receive formal
entrepreneurship education or training by the government as previously mentioned in the study.
Entrepreneurs have no practical training when it comes to marketing activities, writing up business
plans, financial feasibility studies and management skills thus they often feel the utmost need for
help and advice. Moreover, access to information in Egypt is very difficult. Finding data, trends,
figures and market information is a challenge on its own in Egypt due to poor bookkeeping of data
in many sectors, the inconsistency of data, or because the government shares too little information
with the public due to political reasons.
The entrepreneurs often face obstacles to growth due to a number of reasons such as political
instability and high risk for investments in times of turmoil, restrained access to finance, as
mentioned above the ‘missing middle’ problem (the lack of funds ranging from EGP 2 – 10 million),
corruption and the difficulty it creates whilst going through the required procedures for expansion,
restrained access to power (such as electricity and gas), and finally weak networks of
entrepreneurs and lack of proper platforms for partnership and expansion opportunities. Based on
the above challenges to growth internally, entrepreneurs find it very difficult and almost impossible
to gain any access to international markets and grow internationally due to lack of access to
finance, corruption in governmental authorities, and lack of sufficient information and knowledge
about international market trends and demand patterns.
Business Sweden itself serves as an example on how the Swedish government supports Swedish
companies to access foreign markets, assisting even small and medium sized companies in their
internationalization process. Sven Sievers Regional Export Adviser, Södermanland, explains how
companies that are already exporting or are looking to expand internationally, are being enrolled
into i.e. the “Steps to Export” program, where they will be provided with advice and tips on all
possible matter and concrete steps to exports. With Business Sweden having offices in nearly 60
countries around the world, the “Regional Export Adviser” simply directs the company to the market
at focus and the local office takes the concerns further. As Business Sweden is owned by the
Swedish government and the industry, represented by the Ministry for Foreign Affairs and the
Swedish Foreign Trade Association, much of their services are subsidized by up to 50% for small
and medium enterprises; All this in order to support Swedish companies in reaching export
markets, create business and to grow internationally.
4
Sweden: One of the Most Innovative Countries Globally
As innovation is an important driver of growth, Swedish companies and organizations, as well as
companies and organizations in many other European countries, strive to increase their innovation
capabilities in order to increase growth and competitiveness. Since innovation is the driver of future
growth, Sweden has invested in innovation-based incubators as local economic development tools,
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which, favoring the conditions for creation and growth of new business activities, contribute actively
to the development of the country.
Sweden is one of the best countries in the EU when it comes to getting new ideas to reach the
market according to the European Commission. By large Sweden is one of the world’s most
innovative nations, and it has been called the most digitally connected economy. Swedes are early
adopters of new technology and the country’s non-hierarchical society creates a fertile environment
for new ideas. The Swedish government invests a higher proportion of GDP in research and
development than most other nations. Generations of innovativeness have led to a long list of
world-changing inventions like the three-point seatbelt, the pacemaker, the adjustable wrench and
safety matches. More recent Swedish inventions include Spotify and Skype.
5
Egypt’s E-commerce Potential vs. Sweden’s Established Market
Within the Arab world, Egypt is the most tempting market for E-commerce entrepreneurs and
businesses and the Egyptians are certainly the most enthusiastic online shoppers. E-commerce in
Egypt is expected to be on the rise, with 15.2 million buyers in 2014 and around 40.7 million
internet users, making it the largest internet market in the Arab world. Even with only 3.6% of
Egyptians engaging in online shopping the market was around USD 3.2 billion in 2013 according to
Wamda. This makes Egypt a very lucrative option when it comes to E-commerce entrepreneurs. In
fact, a large number of Egyptian entrepreneurs are now exploiting the massive potential in the Ecommerce area. With that being said, E-commerce in Egypt is still fairly underdeveloped and a lot
of opportunities remain to be tackled in this area, such as educating customers about online
shopping, and changing the mentality that online transactions cannot be safe.
If we look at Sweden, it is not only one of the highest figures of personal computers per capita in
Europe but also the highest percentage of mobile users. Alongside this, a lot of schools focus on
providing students with their own iPad to use in their studies and work. Since internet user
penetration in Sweden is one of the highest in the world, E-commerce is an accepted feature of
everyday life for many Swedes, making it an attractive market for international E-commerce
businesses.
Although E-commerce is widely distributed throughout the country, the most active E-commerce
customers can be found in inland municipalities in the north of Sweden. The most popular product
categories in Swedish E-commerce are consumer electronics, books, clothing and footwear. Home
furniture is also very popular.
Digital buyers in Sweden spent a total of SEK 42.9 billion (USD 6.25 billion) on online purchases of
retail goods during 2014, representing 16% growth from 2013. As such, digital accounted for 6.4%
of total retail sales in the country in 2014, according a report from PostNord, Svensk Digital Handel
and HUI Research. Almost three in ten Swedes order something online at least once a month.
6
Company Forms: Egypt and Sweden
Whilst discussing entrepreneurship, it is crucial to highlight the different options for legal company
forms as it gives an idea about the government efforts directed availing options that are in favor of
an entrepreneur.
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The types of companies in Egypt under the Egyptian Companies Law and Investment Law are Sole
Proprietorship, Simple Partnership, Limited Partnership by Shares, Limited Liability Companies,
and Joint Stock Companies. Explained more in detail in the following:
Sole Proprietorship: Engages in a commercial (also export and import) activity for his or her own
account. The Law of Commerce requires from the sole proprietor whose trade capital is L.E.
20,000 or more to keep proper accounting books. The annual profit is taxable.
Simple Partnership: The simple partnership is a business firm formed between two or more
partners who are usually natural persons. There are two kinds of partnerships: the general
partnership and the limited partnership. In the general partnership all the partners are considered
as traders, and are jointly responsible to meet all the business liabilities or obligations without any
limits. This means that if the partnership funds cannot meet its liabilities, creditors can recover their
debts from the partners' private properties. The general partnership should have a trade name
derived from the name(s) of one or more of its partners. With regards to limited partnership,
partners are liable only to the extent of their investment in the partnership. No minimum capital
required; profit of the partnership itself as a legal entity is not taxable, but the share of each partner
(general or limited) in this profit is taxable.
Partnership Limited by Shares: The limited partnership by shares is similar to the joint stock
company with the exception that at least one of the founders has unlimited liability in meeting the
company’s financial liabilities. The liability of the other partners is restricted to their respective
capital contributions represented by shares. Partnerships limited by shares are subject to most
provisions which apply to joint stock companies. Minimum share capital is 250,000EGP.
Limited Liability Company LLC: An Egyptian Limited Liability Company is a closed company where
the liability of each of its shareholders is limited to the value of their shares in the company. The
number of shareholders does not exceed fifty; each shareholder is only responsible within the limit
of his portion of the shares. Among the main features of the LLC are: the limited liability of each
shareholder; a minimum of two shareholders; prohibition on public subscription; and issuance of
negotiable shares or bonds. A limited liability company shall be subject to corporate income tax at
the rate of 20% of its net profits. The capital of the company may not be less than 50,000EGP,
divided into equal shares of not less than 100EGP each. This type of company is usually formed for
small projects that do not require major financing such as companies involved in internal trade and
services activities.
Comparing the ecosystem for company establishment in Sweden, the various forms of business
enterprises fulfils the objective to serve different business purposes and the ranges from a Sole
Trader, Trading Partnerships, Limited Partnership and Limited Company
Sole Trader is a form suitable for the very small business that carry low financial risks i.e.
consulting or small scale trade and handicraft. The administration is quite simple and reduced only
to interactions with the tax authorities. However the business and personal liabilities are not
separated. If the Sole Traders’ turnover exceeds 1,000,000 SEK, the Sole Trader should consider
a Limited Company to benefit from lower tax on dividend compared with salary.
Trading Partnership: is commonly used for businesses owned by couples or professionals, i.e.
income from subletting of fixed assets or small scale trading or consulting business with very low
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financial risk. Mostly used when the parties are not committed to allocate capital. The
administration requires a much more formal approach. The responsibility for profit and loss
including liabilities is fully shared between the owners.
Limited Partnership: is mostly used by professionals. The main difference between Limited
Partnership and Trading Partnership is that in a Limited Partnership two levels of partners exist;
General Partner and Limited Partner. The General Partner is the company’s representative and is
responsible for Profit and Loss including liabilities. The Limited Partner needs to invest at least 1
SEK. Unresolved disputes between the partners are to be settled in court. Limited Partnership is
suitable for low risk businesses.
Limited Company: The form is used when the funders are financially committed however the
business carries a certain amount of risk and insecurity. The benefits of Limited Companies are:1)
Low tax on dividend paid to the owners, 2) Liabilities linked to the company only and the share
capital i.e. no personal responsibility, 3) Benefit from increased value of the company in terms
higher share price etc. 4) Possible to sell the company. The limited company is always the choice
for an Entrepreneur with a clear exist strategy in order to maximize the return of capital.
7
Women and Entrepreneurship in Egypt and Sweden respectively
Despite the efforts done to promote Egyptian women to start their own businesses, unfortunately,
their participation in entrepreneurship remains lower than expected and the difference between the
two genders is quite significant. In 2012, men made up around 86% of early-stage entrepreneurs in
Egypt, and women were the remaining 14%, a significantly low contribution. The main motive for
men to become entrepreneurs is usually to pursue a market opportunity (not out of necessity), as
for women, it is the opposite where women seek entrepreneurship due to necessity not out of
opportunity, and also in search for better working hours so they can still attend to their families and
homes. According to the 2008 GEM report “women in Egypt represent a large untapped source of
entrepreneurial potential and an economic force if that potential is encouraged and supported more
fully” (Hattab, 2008).
Access to finance is also a critical problem for women entrepreneurs due to geographical and
cultural barriers; in most of the villages, there are no banks or NGOs that operate on a small scale.
Few initiatives have tapped into microloans directed to women; there are four banks who offer
micro loans to women, namely Banque Du Caire, Bank of Alexandria, Abu Dhabi Islamic Bank, and
the National Bank for Development, other commercial banks find those types of products to be very
risky, thus they refrain from offering. NGOs continue to take a strong role in the micro financing of
Egyptian women, in addition, the Egyptian post remains the main provider of micro loans (to both
males and females). The Social Fund for Development (which is the leading national program for
micro lending) has also provided micro loans to women. Another example is the Tadamun micro
finance organization, that has served around 60,000 women entrepreneurs in the area of greater
Cairo through micro loans in various income generating activities such as agriculture, shop
keeping, animal farming, etc.
Apart from the above financing programs, there are a few entrepreneurship programs in Egypt that
are dedicated to women with the aim to promote women’s entrepreneurship by helping women
access know-how through advisory services for their businesses, and training, mentoring and
networking opportunities.
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Founded in 2008, Goldman Sachs 10,000 Women Entrepreneurship and Leadership Program is a
global initiative supported by The Goldman Sachs Foundation. This initiative provides women
entrepreneurs around the world with practical business education, business advising, and
networking. Women gain hands on training and skills in key issues such as planning, negotiations,
marketing, employee management and help with access to finance. This is a global initiative that
has reached out to over 10,000 women from 43 countries. This program has been proven to be
successful; the graduates have recorded higher revenues, created more jobs, and experienced
business growth. The program runs in Egypt at The American University in Cairo and connects
women to a professional support network, till to date 372 women entrepreneurs have graduated
from this program.
Another interesting program dedicated to women and administered by AmidEast (America Mideast
Educational & Training Services) is the Arab Women's Entrepreneurship Project (AWEP). This
initiative helps women overcome barriers to participation in the business world via access to
training, mentoring, and other forms of support. Like most other programs, the AWEP aims at
enhancing women’s success in starting-up new businesses or expand existing ones. This program
focuses on women from underserved backgrounds, ones who lack the economic or social means
to receive training in the fundamentals of business and entrepreneurship– on a regional level – to
help them realize their entrepreneurial goals and thereby enhance the region's economic potential.
It is funded by Citi Foundation and training rounds have been offered in Egypt, Jordan, Iraq,
Kuwait, Lebanon, Morocco, and the UAE.
Looking at the Swedish model, there are a number of initiatives and programs that aim at
encouraging women’s entrepreneurship, one of which is the program run by the Swedish Agency
for Economic and Regional Growth (SAERG). The SAERG is a government agency that aims at
promoting entrepreneurship and regional growth through strengthening the competitiveness of
Swedish small and medium enterprises and future entrepreneurs. SAERG works to improve the
general framework for doing business through their key tools: knowledge, networks and financing.
Given the unequal conditions between women and men who want to start, run, lead and develop a
business, SAERG, was in charge of enhancing women´s entrepreneurship between 2007–2014
through a program that was intended to:



Stimulate growth and promote competitiveness and innovation in Swedish industry through
more businesses being run and developed by women
Promote women’s entrepreneurship and leadership now and in the future, through
developing entrepreneurship at universities and higher education institutions
Creating more visibility for women’s entrepreneurship and its importance to the economy
through women entrepreneur ambassadors and by developing facts, statistics and
knowledge about women’s entrepreneurship
This program was done in cooperation with several other organisations and stakeholders on the
national, regional and local levels. Between 2006 and 2012, the number of businesses headed by
women rose by 34 per cent according to Statistics Sweden, where they increased from 143,733 in
2006 to 192,665 in 2012.
The government has also given the Swedish Agency for Economic and Regional Growth the
mission to implement and coordinate a national program to promote women´s entrepreneurship.
The idea is to encourage young women and girls to pursue a path of entrepreneurship through
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highlighting women entrepreneurs as role models in the society. Worth noting is that nine hundred
women entrepreneurs throughout Sweden have been selected as Ambassadors for Women´s
Entrepreneurship since 2008.
They serve as mentors to raise the interest about entrepreneurship, so that more young women
might consider running a business as a viable career choice. The Government’s ambassadors for
women’s entrepreneurship are especially important as role models as they reflect the entire range
of women’s entrepreneurship.
There are also several non-profit organisations that work with female empowerment in the
workforce and with encouraging girls and women to be entrepreneurs. One of them is Winnet
Sverige that works with coordinating and supporting regional and local resource centers and
networks. They work to ensure that women’s competence is utilized by society by generating public
opinion and spreading information about women’s situation in the workforce. One of their core
missions is encouraging women to start their own business and they support them with advice and
networking.
Conclusions and Recommendations to Further Develop Entrepreneurship in Egypt
In order to further develop the entrepreneurship ecosystem in Egypt one needs to ask the question
of How to attract entrepreneurship as an option and alternative to secured employment? As the
basic concerns of secured income and making a living are of great importance, a risky-unsure
future of that being an own business owner, might not be the most attractive career choice at hand.
Hence, raising all individuals’ awareness about establishing SMEs as a viable option for their own
career and professional development is essential. Assisting those who already consider that option
with specific competencies (knowledge and skills) to explore and pursue specific business ideas;
and helping those who decide to start their small enterprise in acquiring the necessary
entrepreneurial and managerial competencies, becomes notably even more crucial in creating and
fostering the entrepreneurship and business start-up scene in Egypt.
8
Many local organizations have been formed throughout the past years, gathering the like-minded
together and creating platforms for knowledge and experience exchange amongst each other.
However a lack of international comparison and benchmark to other African, Middle Eastern or
even European nations is yet still to be developed. With Sweden being in the forefront of having
established a risk and investment friendly environment for young entrepreneurs to live their dreams
and follow their ambitions, a lot of activities for joint collaboration can be identified, with focus on
the promotion of the missing links. This may include (but not be limited to) strengthening the
relationships and learning from each other when it comes to consultancy skills, financing options,
business support and legal advice, but also excelling in branding, social media and engagement
platforms. Capacity building and partnership programs amongst schools and university in both
countries will play a vital role in further skills development. Spreading success stories, on how to
fail and succeed, on how to break down hinders – learning from leading champions, that may
become mentors to empower and encourage the own pathway of taking an initial business idea
fully to market.
Reaching out seems the most essential, and the most easy to hand option, of bringing counterparts
together. Networking events, seminars and exhibition, but also study trips and delegation may
foster the cross-country and cross-cultural exchange of knowledge and experience. Whilst
education and training play a pivotal role in the overall development, it also comes down to hands18/22
on business practices and examples, where Swedish companies already present or planning to
enter the Egyptian market can take on much more responsibility and making use of the Egyptian
entrepreneurial spirit.
The initiative RISEUP SUMMIT confirmed the importance of creating a better understanding of the
state of the current ecosystem, given the diverse representation of the Egyptian landscape. As
RiseUp is going through a transformation, widening the scope, and building upon its position in the
ecosystem, to create the RiseUp experience to other cities within Egypt and the Middle East, a
collaboration with Swedish businesses that would like to get involved deeper in the
entrepreneur/innovation space should be aimed for; including the Swedish Business community,
together with Business Sweden, the Embassy and the Swedish Institute. As RiseUp is further
taking its ecosystem around Europe in events in the ‘hub’ cities, in 2015 it is planned to visit Vienna
and Berlin, but Stockholm should be on the list for early 2016. Furthermore there are opportunities
to start reaching out to actors in Sweden with an objective to bring value from Sweden to RiseUp15
in October.
Also, Mercy Corps (Steven Haley GM of MC Egypt and Country Director of Mercy Corps) has
collected a lot of data and done a lot of work analyzing and visualizing that data to map out the
ecosystem, this is currently being developed into a dynamic database which in turn will become a
platform that allows entrepreneurs and companies to self-identify where they are at any given time
in the lifecycle of a startup business, and which actors exist in that space for them to access
resources. MC Egypt will hand the management of this entire project, together with the tech
mapping tool to RiseUp in order to manage, expand on, and deliver the incentives for
entrepreneurs to participate and keep their data current. This will help quickly visualize Egypt’s
ecosystem and actors, i.e. Injaz opening an accelerator, new funds, the German Chamber of
Commerce and most certainly Business Sweden, if actively involved.
During the course of the underlying study, interviews with Egyptian opinion leaders have shown the
interest and readiness to partner up with Swedish institutions to create similar institutes in order to
enhance entrepreneurial learning. With reference to a meeting held on the 28th of April 2015,
between Business Sweden, the Embassy of Sweden and Dr. Hisham El Sherif, Director for
RITSEC, the Regional Information Technology and Software Engineering Center, and his team,
concrete discussions took place regarding a proposal for potential collaboration based on the
following suggestions, all taking into consideration that RITSEC would be willing to provide in kind
contribution through the utilization of its facilities in Cairo, Egypt:





Establishing a master program with a leading Swedish university, on developmental scope
Creating awareness, marketing and business development program for Sweden with
Egyptian investors
Establishing full fledge incubator program for 100 entrepreneurs and innovators
Creating work groups (think thanks) of both sides, Swedish and Egyptians
Delivering cutting edge professional training programs
Other Swedish organizations, like Sida that has been involved in educational and capacity building
partnerships in Tanzania, South Africa, Rwanda – or the Swedish Institute (SI, with its initiative of
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2
“She Entrepreneurs” a leadership program for young emerging women social entrepreneurs in the
Middle East, North Africa and Sweden, should clearly be approached and included further in a
potential collaboration from both policy and funding standpoints.
An important step toward changing youth’s attitudes regarding entrepreneurship is to integrate
financial education into primary stages of the schooling system for all young people. In addition to
providing a valuable life skill, financial education can improve youth’s understanding of how loans
and other financial services work. This will help reduce misunderstandings and apprehension about
using these types of services. In addition, entrepreneurship education should be implemented in
universities and post-secondary technical institutes, as well as in vocational secondary schools
where many students do not continue on to higher education. Evidence from developed countries
indicates that entrepreneurship education at the secondary and post-secondary levels can improve
attitudes toward entrepreneurship (GEM 2010).
In conclusion, the below recommendations would be important steps to further develop and
enhance the entrepreneurship ecosystem in Egypt:







Including programs that foster creativity, independent thinking, and basic business and
entrepreneurship skills within the basic Egyptian Education System
Introducing management skills as well as soft skills modules in secondary schools,
vocational institutions and universities
Promoting the participation of students in extracurricular activities, and putting more
emphasis on creating the right platforms for extracurricular activities
Directing more efforts into medium range and micro funding and loans to small and
medium companies
Simplifying procedures for starting up small and medium sized companies in Egypt
Raising awareness that an entrepreneurial mindset and culture needs to be developed as
a key competence, particularly at all compulsory education levels (Hattab, 2008)
Promote strategic planning and the formulation of a vision to guide further promotion of
SMEs
Looking specifically into women’s participation in Entrepreneurship in Egypt (referred to in section
5); it is believed that more efforts should be allocated into:


Developing and introducing cultural-awareness campaigns to address the social and
cultural impediments facing women who would like to play a more active role in the
economy through embarking on their own business
Introducing special initiatives in institutions and universities that are dedicated to
encouraging female entrepreneurship
2
The She Entrepreneurs program aims to give the participants innovative tools for sustainable change while seeking to
create an active network of women change-makers. She Entrepreneurs runs for one year, with participants meeting for ten
days in Sweden and one week in the Middle East and North Africa (MENA) region. In between the modules, the participants
work on their own initiative locally, coached by group mentors over digital platforms.
The participants are social entrepreneurs from Algeria, Egypt, Iran, Iraq, Jordan, Lebanon, Libya, Morocco, Syria, Tunisia,
Palestine, Yemen and Sweden who address social challenges and strive for positive social change through initiatives based
on entrepreneurial principles. During the program participants are provided with inspiration, knowledge and tools to develop
a business idea for sustainable change that they have already started working on in their country or region. Through the
program, participants are also offered the opportunity to meet leading social and business entrepreneurs as well as become
a part of an active network of women social entrepreneurs that supports personal and professional development.
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
Developing initiatives to promote entrepreneurship for women, such as a network of
entrepreneurship and business-support services to help with knowledge and skills transfer
and exchange; for example on issues related to mentorship and coaching women on
starting-up businesses, training opportunities for women who seek to join the workforce
through their own businesses, market information and knowledge, and possibly loans that
are solely dedicated to women (Munther Masri, April 2010).
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