Egypt is making upfront to reposition its industrial sector in the future with a huge push towards smart technologies and sustainable production as it seeks to attract international investment and enhance the competitiveness of its exports.
The heart of this change is the Ministry of Industry in the country, led by Khaled Hashem who has proposed a more systematic and data-driven way of industrial development.
Speaking at a high-level panel at the closing conference of the country programme with the Organisation for Economic Co-operation and Development (OECD), Hashem said that the country is going beyond policy blueprints to a framework that is based on measurable results and performance indicators.
The strategy represents a larger sense of urgency in emerging markets to modernize production systems, especially with the advent of global supply chains and growing demands of sustainability. Traditionally viewed as a strategic bridge between Africa, Middle East, and Europe, Egypt is now looking to intensify its manufacturing base by focusing on key industries and enhancing local supply chains.
The key to this effort is the fact that the government in addition to its efforts to reduce the dependence on imports also focused its efforts on industrial localization since this approach would allow reducing the reliance on imports and increase the creation of value in the country.
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Governments are implementing new incentive systems, which are aimed at attracting multinational manufacturers, as well as at supporting local firms in their growth. The shift is in line with broader trends in global manufacturing, where countries are increasingly competing to be regional production centers through selective policy backing, and infrastructure funding.
However, competitiveness today is more than cost and scale; it is more often than not becoming linked with sustainability.
Egypt is moving in front of regulatory changes like the European Union Carbon Border Adjustment Mechanism (CBAM) that is likely to transform the nature of trade by imposing costs on carbon on imports.
By complying with such standards, Egyptian policymakers will hope to preserve the accessibility to the European markets and the ability of the local exporters to survive in the global economy based on the low-carbon economy. This is against a backdrop of increasing anxiety among the developing economies as to how new carbon regulations may transform global trade flows and may affect industries that rely on exports.
To aid such a shift, the government is investing in more intelligent industrial systems. Plans are being formulated to develop a national industrial energy map, expand energy service company (ESCO) models, and promote efficient water use and circular economy practices.
Meanwhile, there is a powerful push to introduce technologies like artificial intelligence, automation, and the Internet of Things into production processes; part of a broader acknowledgment that digital transformation is becoming a necessary condition in the competitiveness of industries, globally.
The cooperation between Egypt and OECD is also an indication that the country is moving towards an evidence-based policymaking process. Through the adoption of international standards and governance structures, the country hopes to enhance transparency, efficiency, and long-term planning in the industrial sector; a strategy that has increasingly been viewed as critical in enhancing investor confidence in emerging markets.
Equally important is the human factor. Having realized that technology cannot be used solely to bring transformation, the government has been increasing technical and vocational training programmes that are industry oriented.
These efforts are aimed at bridging skills gaps, increasing productivity, and equipping the workforce with a more technology-driven industrial environment, through direct input with the players in the private sector. This is indicative of a larger truth that many economies today are increasingly faced with the issue of reskilling their workforce amidst the era of automation.
In the case of Egypt, the stakes are evident. With smart technology, green policy and human capital development, the country is betting that a combination of all these will help it emerge as a serious player on the international scene.
The course is established, and like most industrial revolutions, the actual challenge will be implementation.
