Challenges of Innovation in an Emerging Economy : The Case of Egypt

With five thousand years of civilization, Egypt has embarked on different economic and industrial policies throughout its history. Recently, two national revolutions in 2011 and 2013 have re-shaped the political and social fabric of society, and have resulted in a country-wide motivation towards a new economic vision. Currently, the Egyptian economy can be described as an emerging nation with massive unrealized potential. Using innovation, productivity, and competitiveness as a three-dimensional scope of analysis, this research will analyze the successes and failures of preceding economic policies, compare country performance to emerging economies including Brazil, India, Mexico, Turkey, South Africa and Jordan, and finally, outline the challenges and opportunities for Egypt to be an innovation-driven economy with timeline strategies. Recommendations include more value-added industrial clustering beyond resource extraction, achieving global scale impact, regulating excessive market power of critical domestic industries, applying international quality standards on local goods & services, labor pay by productivity, attracting labor-intensive FDIs with subsequent strategy towards local technological diffusion, information transparency and effective governance on public procurement and purchases, and stronger university-industry R&D linkages