The IT industry of Egypt on the verge of crash

IT experts at the end of the last week recognized Egypt one of critical regions for maintaining IT-Business though before the country showed promises. Due to the mass demonstrations and protest actions against the operating government which continue in the capital of Egypt and other cities of the country already a week the authorities turned off cellular communication and the Internet in the country as the main channels promoting coordination of protesters.

The IT industry of the country failed all in a day, only three months later after the minister of information technologies of Egypt said that the country intends to increase annual profit on the outsourcing industry with $1 billion at the moment in the father-in-law of times to $10 billion by 2020. The government intended to invest $15 million for support of local IT-Business and protection of intellectual property rights.

Recently industry analysts unanimously recommended Egypt as the market with a big IT potential, in particular for the European companies which match it in respect of a temporary zone.

The European association of outsourcing in 2010 called Egypt the country of year. "Egypt well is suitable for multinational corporations for maintenance of their operations in Africa and in the Middle East", - the director of consulting company NeoAdvisory Atul Vashistha said then. Then strengths of Egypt as from the point of view of call centers, and IT were noted.

Among the other companies which relied on Egypt, were HSBC (located in the country the global service center for transactions in the Middle East), Alcatel-Lucent (technical support for Africa, the Middle East and the Southern Asia), the Indian outsourcer of Wipro and even IBM which in Egypt has a center of nanotechnologies.

Political disorders in the country can have an impact on the industry within long weeks, and, naturally, negative. Many companies will select a geographical alternative now in the form of India or Philippines where the IT industry does not feel such global shocks. Degree of sensitivity of emerging markets to negative factors is very high.

If the situation is stabilized this week, then the event can be considered as an isolated case if the conflict between opposition and the authorities drags on – the IT industry of the country is waited by the most unfavourable effects.

Other experts are even less optimistic: according to them, the event is fully enough that the negative trend was fixed for a long time and Egypt significantly conceded for benefit of competitors – India and Uruguay.