Will entrepreneurs solve Egypt's problems?
Entrepreneurial Attitudes and Perceptions in Egypt
The main motive of early stage entrepreneurs in Egypt is necessity, as about 3.6 million Egyptians are early stage entrepreneurially active, of which 1.4 million are nascent entrepreneurs, 2.2 million are owners of new firms, and 1.9 million are owners of established businesses.
The Global Entrepreneurship Monitor released a report yesterday on Egypt’s startup scene, prepared by Dr. Hala Hattab, a professor for Business Administration and Entrepreneurship at the British University in Cairo.
Even though experts put high hopes on entrepreneurship to bring the country’s economy back on track, it does not seem like startups will help with solving the unemployment problems Egypt is facing. About 13.5% of Egyptians are unemployed, but early-stage enterprises are most likely to either be consumer-oriented or very small, i.e. employing fewer than five workers and expected to create 5-19 jobs in the coming five years. The trend is capital-intensive rather than labor-intensive. Moreover, almost 40% of Egyptian discontinued businesses did so because the business was not profitable.
Egypt has one of the lowest business discontinuation rates compared to other factor-driven economies, according to report.
The segments of society that are mostly entrepreneurially active are either men, 25-34-year-olds, post-secondary degree holders, Cairo-residents or self-employed people. However, it seems that most of the startup founders feel the need for financial security before storming the scene, as the fourth highest entrepreneurially active adult population has an income of EGP8,001 – 10,000. It is not the best salary to have, but it does give a sort of security to fall back on.
Distribution of Early Stage Entrepreneurs and Established Businesses
Additionally, it is noticeable that most entrepreneurs are not students, as those with the second highest score on entrepreneurial activity are 25 years or older.
Women only represented 14% of people who were either trying to start a business or managing and owning a business that is less than three and a half years old.