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The Internet contributed EGP 15.6 billion to the Egyptian Economy in 2011
29/11/2012

Google and The Boston Consulting Group (BCG) presented a new study entitled “Egypt at a Crossroads: How the Internet is Transforming Egypt’s Economy”. The independent report was prepared by The Boston Consulting Group after being commissioned by Google in an attempt to describe and quantify the way the Internet is affecting the Egyptian economy. The report highlights the benefits and key success factors for Egypt’s future economic growth.

  Source Tech Egypt
  Reference http://www.techegypt.com/article/336/title/The-Internet-contributed-EGP-15.6-billion-to-the--Egyptian-Economy-in-2011
 
Article

“With the largest population of Internet users in the MENA region – 31 million as of July 2012 –The Internet’s immense potential to contribute to the development of society and the economy is something that can no longer be ignored,” said Wael Fakharany, Regional Manager Google Egypt and North Africa. “At Google, our mission is to organize the world's information and make it universally accessible and useful; this study is just one way that Google is contributing to the wealth of information available about the benefits of Internet and taking the lead on how Egypt can realize them.”

The BCG report shows that in 2011 the Internet contributed an estimated EGP 15.6 billion to the Egyptian economy which constitutes 1.1 % of GDP and is comparable to the GDP share of other sectors in Egypt including health services (1.3%), education (1.1%) and oil refining (1.1%). According to the study, the Internet’s contribution to Egypt’s economy has been driven by innovation and entrepreneurship, prompting investments by individuals and private companies as well as government investments in infrastructure development and improving access to the Internet.

The report on the contribution of the Internet to the Egyptian economy highlights the fact that the Internet promotes growth by enabling the development of new business models, supports development of exports, lowers the cost of marketing and distribution to foreign markets and increases productivity. The report shows that where 59% of large companies have websites, and 41% of medium sized businesses have websites, only 13% of small businesses do. The Internet can level the playing field for these smaller entities by providing cost effective advertising and distribution channels.

While the report shows that Egypt is making progress in terms of infrastructure and usage, there are still vast opportunities and much potential to capture the true value of the Internet. The study identifies three primary drivers of growth for Egypt’s Internet economy: unlocking the potential of e-commerce with improvements needed on both the supply and demand side; promoting e-inclusion by expanding the reach of the Internet across Egypt; and building business engagement by leveraging the Internet commercially.

Based on the successes of other countries, the report projects that Egypt’s Internet economy could grow substantially over the next five years at an estimated 22% per year in nominal terms with significant benefits to consumers, businesses and society overall to reach more than 52 billion Egyptian pounds by 2017.

“Egypt’s Internet economy is now at a crossroads. The choice is whether to continue with business as usual or to take bold steps now to unlock the potential of e-commerce and energize online business-to-business transactions, thereby driving substantial growth in the Internet’s contribution to Egypt’s GDP” stated David Dean, Senior Partner and Managing Director at the Boston Consultancy Group.

By having commissioned this report, Google aims to providing a better understanding of the economic impact of the Internet, identify the additional opportunities the Internet represents and how Egypt can make the most of them. One opportunity Google has embraced is investing in enhancing the quality and quantity of Arabic content on the Internet. The Arabization of the Internet is a crucial component of Google’s strategy in the MENA region and is part of Google’s commitment to educate users in their own language.

FACT SHEET:

• Internet contributed 15.6 billion Egyptian pounds to the Egyptian economy – meaning 1.1% to the GDP in 2011.

• Projection: Egypt economic growth by 22% (nominal) annually over the next five years and 12% (real terms).

Contribution to Egyptian Economy in 2011 in Comparison by Sector

Sector

% Contribution to the Egyptian GDP

Internet

1.1%

Health

1.3%

Education

1.1%

Oil Refining

1.1%

Food & Hotels

3.2%

Retail & Wholesale

11.5%

Trade Commodities

14.9%

Internet in Egypt

- 10 years ago, it didn’t exist

- Today 31 million users

- 38% of the population is online

- Internet usage grew by 17% in the last year alone

- There are 2000 government run IT clubs nationwide that are popular

- More than half of Egyptian internet users are under 25

- 36.3% spend more than 8 hours a day online (more than 1/3 of all users); nearly 40%

Internet in Egypt between 2009-2011

- Number of mobile broadband increased 158%

- Fixed broadband increased 69%

- USB penetration increased 600% from 2009-2011

- 1.4 USBs for every fixed broadband

Mobile Internet in Egypt

- 45% went online using mobile including USB.

- 92.6 million mobiles in Egypt and 10.5 million of them are subscribed to the Internet (12%)

- Smart Phones growth by 26%

- 87% country population is covered by 3G service (by 2015 – 98%)

Companies with websites

- 59% large

- 41% medium

- 13% small

 
 
 
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