Connecting Shores: Assessing Egypt’s ICT nearshoring potential
- The population in the Netherlands, currently only growing due to migration, is facing labour market shortages exacerbated by an aging population.
- Filling these shortages through labour migration adds pressure to the existing housing crisis and strains public services. To better steer migration, the Dutch government also cooperates with countries of origin and transit.
- For these partnerships to be effective, they must be mutually beneficial. Creating economic opportunities for the local population is a way to achieve this.
- Nearshoring ICT jobs—bringing work to people rather than people to work—could create economic benefits for both Egyptians and the Dutch in the technological sector.
With the Netherlands facing severe labour shortages, particularly in the ICT sector, and a government intent on reducing migrant flows, innovative approaches are necessary. In this context, the growth of Egypt’s ICT sector offers significant opportunities for the Netherlands. It is characterized by openness to private investment and boasts a substantial pool of well-educated graduates and skilled professionals. However, bridging the gap between the two countries requires addressing critical challenges, such as visa restrictions for remote workers visiting company headquarters in the Netherlands and the need for tailored training programs to prepare workers for the Dutch market.
To overcome these barriers, a Dutch model for ICT sector nearshoring can be developed with Egypt as a pilot, incorporating elements that could later be adapted to other countries. Key actions include raising interest for the option of nearshoring among Dutch ICT firms that are faced with labour shortages, fostering collaboration between the Dutch embassy and Egyptian and international recruiting companies and ITIDA to establish win-win partnerships, such as providing soft skills training for Egyptian workers interested in engaging with the Dutch market. This training could then be refined within companies to meet specific industry needs.
This study furthermore identified several variants for offshoring, highlighting the importance of three not-mutually exclusive approaches for developing this economic segment. These aim to fully harness the potential of such collaborations for various companies and outline actionable policies for policymakers, equipping businesses with the tools needed to maximize the ICT sector’s potential. Cooperation on offshoring ICT could be mutually beneficial and thereby also help to spur economic growth in the Netherlands and Egypt. By ‘connecting the shores’ the countries could help each other, whilst addressing concerns of citizens in need of ICT services and jobs, as well as societal concerns to avoid brain drain in Egypt and rapid population growth in the Netherlands.