20 May 2010

Not only does national competitiveness depend only on macroeconomic stability, but also microeconomic productivity as a major engine of economic growth because wealth is created at the business and industry level. Cluster initiatives are an important way of fostering industrial productivity by increasing the networks within the industry, along its supply chain and with supporting organizations such as research intuitions or universities. Clusters are an efficient tool to increase not only productivity, but also innovation and positive economic spillovers. Successful clusters usually combine what is known as the "triple helix" of government, private sector and academia. While private-public partnership has well-known benefits, the inclusion of academia is becoming increasingly important as a source of innovation, research and development and ultimately competitiveness. This is especially true in today's global economy where low-cost labor and natural resource advantages are no longer sufficient sources of competitive advantage. Instead, knowledge, skills and expertise have become the cornerstones of a more innovative and successful industry.

According to the Global Competitiveness Report (GCI), Egypt's State of cluster development rank had been improving through the past three years 2007-2009 from 61 out of 178, 46 out of 181 and 41 out of 183 respectively.

Such improvement is due to recent policymakers' interest in supporting the existing clusters and establishing new ones, as they believe that innovation and creativity is an important mean to develop clusters where new models and high level of innovation would eventually lead to leapfrog into higher value added activities.

Clusters are an old phenomenon in Egypt; there are major existing organic clusters in Egypt such as Damietta Furniture Cluster, Sha'a El Te'aban District Marble and Granite Cluster, Sharm El Sheikh Tourism Cluster, El-Mahalla El-Kubra Textile Cluster and Robiky Leather Manufacturing Cluster. One of the oldest traditional clusters is the furniture manufacturing industry in Damietta where Egypt has managed to upgrade a local industry in global value chains. The Smart Village in Cairo is also another important Operational Technology Cluster and Business Park. It offers a host of connective services from business support to athletic facilities, which distinguish it from traditional cluster models.

Over the past four years, business climate in Egypt has been witnessing many improvements and progresses; some of the remarkable developments were establishing the one-stop shops and entering new technology through computerizing the commercial registry and building electronic database about companies existing in Egypt. All such developments helped in facilitating the process of doing business in Egypt.

Our main focus is to ensure that all clusters in Egypt are offered all opportunities possible for development through stimulating new business formation that support innovation and expand clusters, increasing their productivity, producing new products and services and opening new markets, which would eventually ensure long term sustained economic growth for Egypt.


Prof. Mona El Baradei
Executive Director
Egyptian National Competitiveness Council (ENCC)