The Egyptian ICT Value Chain: Leapfrogging the Triple Gap

This research paper aims to determine whether the Egyptian ICT sector is following the low road or high road growth path, and the extent to which the sector achieves its full potential and responds promptly to the current technological revolution. Finally, the paper presents broad guidelines on how this sector can reach its full potential. To achieve this goal, a detailed assessment of the ICT sector value chain is conducted from three main aspects: analyzing the performance of the ICT sector over time and compared to Egypt’s competitors and neighboring countries; assessing the strategic, institutional and legislative frameworks governing the sector; and finally, evaluating the extent to which the foundations of sectoral development strategies are compatible with international best practices, and the extent to which the sector is able to respond to current global trends. The study concludes that Egypt follows the low road growth path by following a gradual approach in upgrading the sector. Within this gradual approach, implementation of the sectoral development strategies is slow, which resulted in gradual improvement in sectoral performance over a long period of time. However, considering the strong dynamism that characterizes this sector, there is no room for adopting a gradual approach. Leapfrogging is a must to keep up with this strong dynamism. This requires adopting policies that do not aim at improving the status quo, but rather target building a new set of capabilities, to consolidate gains from accelerating entry into high-value-added activities and positively interact with the technological developments underway.