Can Egypt Turn Its Talent Pool Into a Digital Export Industry?

Egypt’s outsourcing industry is becoming a serious source of jobs and foreign currency. Its next test is harder: moving from cost-driven business services into software, AI, cybersecurity and engineering before automation erodes the lower end of the market.

Egypt has proved it can export digital labour. Now it must prove it can export digital capability.

The country generated $7.4 billion in broader digital exports in 2025, while ITIDA puts the narrower offshoring segment — covering IT services, business-process services and engineering R&D — at $4.8 billion, double its 2022 level. Egypt now hosts more than 240 offshoring companies operating over 270 delivery centres, serving customers in more than 100 countries.

More recent government statements put 2025 outsourcing revenues at about $5.2 billion and target $6 billion in 2026. The published official material does not clearly reconcile that figure with ITIDA’s $4.8 billion series, so the latter provides the more conservative benchmark. Depending on which official base is used, reaching $6 billion this year would require growth of roughly 15% to 25%.

The statistical discrepancy matters. But the direction does not: digital services are emerging as a significant source of foreign-currency earnings for an economy that needs both export diversification and skilled employment.

Scale is no longer the main question

Egypt’s attraction rests on a powerful combination of demographics, geography and cost.

ITIDA says the country produces nearly 750,000 university graduates annually, including around 50,000 engineers, while an estimated 850,000 Egyptians participate in digital freelancing. Its proximity to Europe and the Gulf, multilingual workforce and relatively competitive labour costs strengthen the case for companies seeking nearshore alternatives.

Corporate expansion suggests that proposition is working.

At the November 2025 Global Offshoring Summit, ITIDA signed 55 agreements expected to create more than 75,000 jobs over three years. Of the participating companies, 39 were expanding existing Egyptian operations while 16 were entering the market for the first time. Earlier agreements signed with 29 companies in 2022 initially envisaged 34,000 export-oriented jobs; ITIDA says 60,000 had been delivered by the end of 2024.

Expansion by existing investors is particularly significant because it provides a stronger test of Egypt’s competitiveness than initial investment announcements.

But job numbers alone are becoming an inadequate measure of success.

From seats to skills

The global outsourcing industry is changing just as Egypt reaches scale.

Generative AI can increasingly perform the routine customer support, translation, back-office processing, coding and testing that helped build the first generation of offshore services.

Egypt therefore faces a race up the value chain.

There are signs that the transition has started. Systems Limited’s Smart Village operation employs around 250 engineers in software development and IT services and plans more than 380 additional jobs. About 85% of its Egyptian business is export-oriented, while the company plans to make Egypt its second-largest global operation after Pakistan.

EY MENA, meanwhile, plans more than 1,000 specialised jobs over three years through an Egyptian regional operation covering cybersecurity, digital engineering, data analytics, artificial intelligence and other advanced technology and consulting services.

These investments matter more strategically than another headline count of outsourcing seats. They indicate whether Egypt can move from processing transactions for overseas companies towards designing and operating their technology.

The competitive benchmark is also rising. India scored 93.9% in the 2025 Offshore CX Confidence Index against Egypt’s 80.9%, which placed it seventh. The Egyptian government’s own analysis drew the lesson: future competitiveness will depend increasingly on AI, automation and specialised digital skills rather than cost alone.

Cost is an opening, not a strategy

Egypt’s wage advantage remains important, particularly for companies earning dollars, euros or Gulf currencies while carrying much of their labour cost in Egyptian pounds.

But a currency-driven advantage is not durable. Wages rise, exchange rates move and rival destinations compete. AI poses a deeper challenge because it can reduce the number of workers required to deliver the same service.

Egypt’s longer-term advantage therefore cannot simply be that it is a cheaper place to employ graduates. It must become a more productive place to employ engineers.

ITIDA itself is commissioning an updated ICT salary survey in 2026, underscoring the importance — and fluidity — of the country’s labour-cost proposition.

A useful way to view the transition is through export productivity. Dividing ITIDA’s $4.8 billion offshoring figure by an industry employing more than 200,000 people produces a rough indicator of about $24,000 in export revenue per worker.

That is an MEO calculation, not an official productivity measure: the export and employment datasets may not cover precisely the same population. But the direction of the metric matters.

A call-centre employee and a semiconductor-design engineer both count as one job. Their contributions to export revenue, technological capability and resilience to automation can be radically different.

Egypt’s next objective should therefore be not merely more digital jobs, but more value from each digital job.

That requires deeper capabilities in software engineering, cybersecurity, cloud computing, data science, artificial intelligence, embedded systems and semiconductor design.

Capturing the value, not just the work

There is a second transition that employment statistics can obscure: who owns what Egypt exports?

Multinationals locating delivery centres in Egypt generate jobs, training and foreign-currency earnings. They can also transfer technical expertise and connect Egyptian workers to international markets.

But providing services for foreign companies is not economically equivalent to building Egyptian companies that own software, intellectual property and international customer relationships.

Service exports principally capture wages, margins and local expenditure. Successful technology products can additionally generate intellectual property, recurring licence revenues, profits and enterprise value.

Egypt therefore needs to climb another ladder:

business-process exports → engineering and IT services → software and technology products → intellectual property.

That requires more than technical talent. Egyptian companies need growth capital, international sales capabilities, certifications, intellectual-property protection and access to global distribution networks.

The government already recognises the broader shift. Its offshoring strategy has sought to establish Egypt in emerging fields including AI, advanced data analytics, embedded software and chipset design, rather than relying exclusively on traditional outsourcing.

The $6bn test is only the beginning

Reaching $6 billion in outsourcing exports in 2026 would strengthen the case that Egypt has built a scalable services-export industry.

It would not settle the more important question.

Egypt needs to demonstrate that export revenue can keep rising as AI reduces the labour intensity of routine services; that software, engineering, cybersecurity and R&D can capture a larger share of the business; and that Egyptian-owned technology companies can retain more of the value their workers create.

Few industries offer Egypt the same opportunity to address three structural economic challenges simultaneously: skilled employment, foreign-currency generation and export diversification.

Its first outsourcing breakthrough was built on cost, language, geography and labour supply. The next must be built on productivity, engineering depth and intellectual property.

Egypt has already shown that it can export digital labour. The measure of the next decade will be whether it can export technology.

The race is not simply to create more digital jobs. It is to move Egyptian talent up the value chain faster than technology automates the bottom of it.