Cairo is one of those global centres, where world leading deep tech companies develop, according to the DeepTech Index. The Index, produced by the European Centre for Entrepreneurship and Policy Reform (ECEPR) with support from Nordic Capital, maps the leading deep technology centres, focusing on key, future-shaping technologies.

Those countries that have a high share of world leading deep tech companies, per million adults, tend to have strong protection for private property. Protection of physical property as well as intellectual property, is important in order to stimulate investments in advanced technologies. In Egypt there is a need to improve property rights for physical creation as well as for patents, trademarks and other immaterial values. Better legal framework is needed in courts to follow up infringements.

Another finding is that countries with lower profit taxes tend to be more attractive for development of world leading deep tech companies. Here Egypt performs better than the average, in comparison of those countries which do host world leading deep tech companies. Capital gains taxes are also competitive in Egypt. Those countries which have a low tax burden as share of the total economic output, tend to also have more world leading deep tech companies per million adults. Tax policy overall makes Egypt a competitive economy in this regard. Another finding is that those countries where students have higher knowledge in mathematics, science and reading, tend to perform better in deep tech development. Having world leading universities in engineering and technology is also closely related to success in deep tech.

The strength of Egypt lies in clean tech development. Clean tech innovations are needed across the world, in order to promote a better natural and living environment. In particular these technologies are useful for handling the stress caused by population change and urbanisation.

Egypt attracts foreign direct investments, amounting to some 2.4 percent of total national economic output. Foreign direct investments from Egypt to other countries amount for just under 0.1 percent of the total economic output. One strength of Egypt is that the share of high-technology exports, as percentage of all manufactured goods, has increased significantly over time. Since the financial crises in 2008, the share of high-technology exports has gone from 1.1 to 3.2 percent of all goods exports. "Given that Egypt can continue to increase the level of high tech in exports, and grow with deep tech, the country is likely to become a more important investor in other economies as well as continue to be an attractive country to invest in", said Dr. Nima Sanandaji, author of the study.

The index finds that those countries that succeed with deep tech, tend to have lower unemployment levels. “Promoting deep tech development is important as it drives human progress and generates economic opportunities for the leading regions. Countries successful in advancing Deep Tech also tend to experience favourable labour market outcomes. For every additional globally leading deep-tech company per million adults corresponds to a 1.26 percentage point decrease in unemployment,” said Klas Tikkanen, Chief Operating Officer at Nordic Capital Advisors.

If the number of globally leading deep tech companies in Egypt doubled, this could be linked to a reduction of unemployment long term by more than half a million. A part of this is since large international companies in advanced technologies generate export revenues and create jobs directly as well as through exchange with other local businesses. More importantly, achieving more deep tech success requires improvements of the overall business climate in Egypt. This would lead to many medium sized and smaller companies also succeeding. The roadmap needs to be based on improvement long-term in the education system, with focus on mathematics and engineering skills, and better protection for physical as well as immaterial property. This will boost the technological competitiveness of Egypt, and long term transform into significantly better job outcomes for the population.

For questions or more information, please contact nima@sanandaji.se