Egypt was ranked 15th in the latest Kearney report “Global Services Location Index (GSLI) 2021”, recording 5.62 percent in the index and retaining its top spot in the Middle East and Africa (MEA) region, the Information Technology Industry Development Agency (ITDA) announced on Monday.
The report themed “Toward a Global Network of Digital Hubs,” showed that Egypt was the only country in the MEA to make it to the top 20, with the UAE ranking 25th and Turkey 26th.
The index put Egypt before some European service locations such as Germany, Portugal, and Bulgaria, and competing against Poland (14th), Colombia (13th), and Estonia (12th).
India, China, and Malaysia continue to retain the top three positions.
The GSLI report helps companies decide on the location of their offshore operations, as the index examines companies’ complex and shifting choices through an analysis of more than 60 countries.
The index analyses 47 metrics across four main categories, including financial attractiveness (35 percent), people skills and availability (25 percent), business environment (25 percent), and digital resonance (15 percent), while the relative weights of each metric are based on their importance to the location decision that is derived from client experience and industry surveys.
For Egypt’s performance in these four categories, the country’s financial attractiveness attained 2.75, while India's stood at 2.83, the Philippines 2.82, and Indonesia 2.78.
On people skills, Egypt attained 1.05, followed by Indonesia 1.26, the Philippines 1.32, Turkey 1.41, and India 2.18.
In business environment, Egypt scored 1.15, followed by the Philippines 1.15, India 1.17, and Kenya 1.29.
Regarding digital resonance, Egypt attained 0.67, followed by Mexico 0.67, the Philippines 0.67, Vietnam 0.68, and Brazil 0.68.
The report noted that Egypt is considered a unique location due to its financial attractiveness, offering competitive compensation and infrastructure costs.
It also highlighted Egypt’s progress in developing the ICT sector.
The Egyptian government is ramping up its “Digital Egypt” initiative, which has yielded such gains as an Ericsson digital hub in Cairo to produce cognitive software for global markets, the report said.
“We are very excited to maintain our leading position in the global business services arena both regionally and globally that surely adds impetus to Egypt as an IT export destination. Egypt has been hailed as an attractive offshoring destination for the multiple competitive advantages it offers and the resilient performance of the IT sector. The offshoring industry’s response to COVID-19 pandemic was seamless owing to business continuity measures enabled by strong ICT infrastructure,” said Amr Mahfouz, ITIDA’s CEO.
The authors of the GSLI report predict that cost competitiveness will not constitute a priority factor for choosing/favouring a BPO location. However, digital resonance will represent a key priority for business leaders and decision-makers.
Accordingly, the 2021 index introduced the “digital resonance” metric that grades countries based on the digital skills in the market, digital outputs, the amount of corporate activity, and legal protections of intellectual property. The report highlighted the shift towards favouring WFH and highly adaptable business models, which increased the demand for digital skills.
The 60 countries in the 2021 GSLI were selected based on corporate input, current remote services activity, and government initiatives to promote the sector. The metrics used to evaluate location attractiveness were determined from responses to Kearney surveys, other industry questionnaires, and knowledge obtained through client engagements over the past five years.