لخّصلي

Most of the international economies depend basically on the role of SMEs in supporting the national economy in different countries. The Egyptian economy through out history contained large number of small projects which constituted major element in that economy.
In general, the importance of the small projects can regarded to different reasons, including:
1- Their ability to use capital in relatively high productivity.
2- Being highly specialized makes them more able to produce a major reduction in production costs.
3- Their high ability of innovation.
4- The high skills that their labors should have.

In Egypt, SMEs historically played a relatively significant role in the process of economic development in Egypt:
1- First of all small projects are considered one of the balancing circles in the economic structures due to their flexibility and quick response to the changes in the local and international markets.
2- They contribute in the investment of local savings and capital, and because of that they help in activating the needed local investment.

The small size of their investment helps in reducing the amount of losses and in directing the investments totally to production processes.
They participate in reducing the intense of poverty, and in increasing the standard of the living of these poor segments of the society mainly by providing job opportunities to poor and unskilled labors.
In addition, they help in generating extra income to those poor segments in the society when they own and operate very small enterprises.
Small projects also play effective role in the process of humane development as they
They are considered one of the major sources of real and permanent job opportunities, especially when put into consideration the fact that due to the expansion in the polices of market economy, the monopoly that many companies have enjoyed in the past are no longer suitable to the dynamics of the current markets, also governmental companies that absorbs large number of labors are no longer available, nothing is now called fixed lifetime job.
Small projects usually don’t allow the existence of labor force that isn't properly abused mainly because of the nature of their business and that has specific orientations.
Technically, SMEs constitutes one of the major mechanisms of technological development due to:
Their ability to modernize production processes quickly and with relatively low costs.
They also provide effective mechanism for working in integrated groups so as to achieve the maximum possible abuse of the available resources in every project; they also provide chances for integration with larger enterprises so as to promote their existence in technologically developed projects.
They contribute in activating the use of local materials and secondary products, and the process of recycling of production.
They also contribute in developing the usage of local technologies, and increasing their quality through contacting with external markets and quality terms.
They also help in preserving the local identity as they adopt the industries and projects related to local environment and thus contributing in increasing the sense of belonging and the necessary awareness among people.
Another importance of the SMEs appears in the role that they play in the newly inhabited societies. One of the major developmental decisions which has recently took place, and which shall has great effect on the Egyptian economic, social and human development is the decision that the government took in Oct 1996 which include the increase of inhabited space in Egypt from 5, 5 to 25%, and naturally that process will depend largely on small projects, for the following reasons:
The plan includes the elimination of the overpopulation in large cities through many incentives which shall depend mainly on the individual initiatives through private investment in small projects or through working in them.
The expected small size of the markets of these new communities and their horizontal expansion make the small projects, with their high flexibility and low costs, more able to satisfy the gabs in the demand of goods and services in these communities.
The cultivation of lands and the provision of water resources plans in addition to the dictation of small farms to the youth indicate that the small agricultural and industrial enterprises can attract large number of people and encourage the internal immigration.
The next point in the importance of SMEs is their significant role in the large national plans:
They help in overcoming the problem of over population and the relative scarcity of resources by increasing the inhabited space which shall in turn change the nature of the economic and social formation in Egypt.
Their major role in finding home for the large national projects (Toshka project for example).
SMEs will enter relatively new activities in Egypt such as oil services, tourism and environment protection services especially in the new areas that need to be inhabited.
However, SMEs face major problems that constitute significant obstacles in their process of development.

First, and most important, are the financial ones :
Most of the SMEs suffer from the limited resources needed for their development most probably because of the absence of effective financial institutions capable of providing the needed assistance to these enterprises .and that in turn limits the possibility of the emergence of new enterprises or the development of existed ones.
In Egypt, according to the 1997 statistics, 1, 8 billion Egyptian pounds has been given to these projects, which constitutes .76 % of the GDP in the same year. Most of that money has been dedicated to more than 40 programs fostered by different institutions. Closer view can show that there's a poor participation of the institutions that are supposed to have major role in the financing process, most importantly is the Economic Development Bank which contributes only by 15.7% of the total finance. Commercial banks as well have week participation which never exceeds 20% despite of the vital role they could perform in the facilitation of the financial assistance to these projects. And due to the relative weakness of the institutional capabilities in most of the nongovernmental organizations in Egypt, there's a high possibility that these organizations won't play an effective role in decreasing the existed financial gab.
The other obstacles that face the SMEs are technical ones:
Statistics show that the large number of labors in these projects can hardly read and write (46%), 28.8% are literate and 8.1 are university graduates. which indicate that these kind of projects don’t attract the bachelor degree holders and that justify the urgent need for incentive programs for the university graduates in order to increase their awareness about the profitability behind the free business.
In addition to that is the problem of the difficulty of obtaining the modern technology and the needed information about the market and consumers' desires.
The difficulty in obtaining the inputs of production with high quality especially imported inputs as the attainment of these inputs require the competition with export markets in addition to the competition with larger enterprises . Also the high custom tariffs imposed on these imported inputs plus the long bureaucratic procedures constitute on of the major problems that alter the needed development of SMEs.
The difficulty in obtaining the appropriate location for these projects, which in turn leads to their isolation from the market and generates relatively high cost when marketing their products.

The other kind of obstacles is marketing ones:
The marketing activity of these projects is limited to their geographical frame .The absence of marketing networks with high competitive edge that could provide the enterprises with the necessary information regarding the market needs; this is either because they are owned by government or because they serve larger enterprises.
SMEs in Egypt is still unable to obtain a competitive edge in international markets due to various reasons including their low production rate, their inability to compete with products with higher quality , obstacles on applying the modern technologies of production ,and finally the absence of the needed finance for increasing the quality and the applying needed improvements .
The absence of the necessary integration between SME's and foreign or larger enterprises
The difficulty in obtaining the contracts and the tenders of the government due to several reasons including the long and complicated procedures in addition to the absence of the needed information and the contracting laws aren't prepared to encourage the SMEs , unlike other countries that their laws provide a relatively advantageous position to SMEs The lack of supervision over the quality of the inputs and the products thus they aren't able to obtain a relatively competitive edge in the national markets and accordingly in international ones.

The last kind of obstacles is institutional and administrative ones:
In order for the SMEs to gain the necessary permissions they should prove their commitment to about ten laws.
The laws that regulates the private sector in Egypt paralyze the development of the SMEs ; so that as if they tried to expand ,they face many requirements that they usually tend to avoid by maintaining their small size or at least by staying in the informal frame . Therefore the revise of these laws and regulations may constitute an incentive for the growth of these enterprises.
The recent reports of the UNIDO refers to the fact that most of the interventions of the governments of developing countries for the purpose of providing assistance to small enterprises have been undermined because of the complicated bureaucratic procedures and the conflicting administrative structures .
The weak structures of the SMEs is considered an additional burden over their development, due to what have been mentioned before including the absence of the basic skills in business administration and accounting, the difficulty of obtaining the consultative and other important services and finally the poor educational level of the owners of these SMEs makes them unable to realize the importance of these skills and services.
Their lack of the elements of creative and effective administration in the market field makes them vulnerable to abuse and alter their development further.
Finally the poor participation of women in the economic development and more specifically in the establishment and management of the SMEs is one of the major issues that should be considered in Egypt.
Business Incubation in Egypt:
One of the major steps that have been taken toward the improvement of the status SMEs and helping them in overcoming some of the various obstacles mentioned above is the business incubation.
Business Incubation is the fastest growing economic development strategy for business creation. Studies have proven that business incubation effectively builds strong enterprises. Incubators offer a full array of business assistance services to small and medium enterprises. A business incubator is an organization of services designed to nurture start-up businesses. A wide range of services can be offered within an incubator, including management assistance, access to financing, business or technical support services, and shared office services such as access to equipments, and expandable spaces. Business incubation is predicated on the notion of networking. Incubators are set up so the enterprises in them can interact with one another.
A business incubator is a dynamic process of business enterprise development which incubates young firms, helping them to survive and grow in the early years of their start-up. Small businesses supply more jobs than large corporations. Small businesses incubator helps in creating new jobs through increasing the success rate of the small business. The incubator is an integrated business process that provides all the facilities as a suitable place with all the requirements to start small businesses. This process is managed through the presentation of all kinds of support; technical, financial, administrative, and marketing support. The Egyptian incubation program's main goal is to produce successful graduates, businesses that are financially freestanding when they leave the incubators, usually in two to four years.
Business incubators provide start-ups with business and management assistance, affordable space. A business incubator's services usually include a network of relationships with other business owners who provide support for each other and who may become customers or suppliers; financing assistance, such as help in obtaining a bank loan; Flexible spaces often at below market rates.
Business incubators are generally operated by Non Governmental organizations. They are often targeted to serve the needs of light manufacturing and service enterprises and those developing new products or engaged in research and development.
An industrial park is a controlled industrial work environment designed to strengthen and speed the growth of small industries by providing a climate for the support and development of potential successful small entrepreneurs serving their respective surrounding industrial region.
The purpose of a science and technology park is to support applied research with the goal of transferring the research to successful business and marketable products.
The Egyptian Incubators Association was formed as a non-governmental organization (NGO) in 1995 according to the Egyptian law no. 32 for the year 1964 and now EIA works according to the law no. 84 for the year 2002 by no. 5284. EIA was established to execute the incubator program in Egypt in order to establish programs for small enterprise development and to contribute to the economic development process.

EIA Main Activities
1.Carrying out economical and engineering studies in the field of SMEs
2.Establishing & managing SME’s facilities & complexities
3.Adopting international experience to Egyptian environment.
4. Carrying out National Entrepreneurship Development Program
5. EIA is acting as spearhead organization in Middle East in the field of SMEs development
6. Adopt/adapt worldwide experiences to Arab countries.
EIA MISSION
The concept of business/ technology incubator was developed to help overcome the difficulties and delays experienced by SMEs during their start-up phase. It offers various kinds of support, managerial, technical, legal and financial support.
EIA OBJECTIVE
It provides entrepreneurs/ startups with the experts, networks and good business environment they need to help developing their ventures creating high-tech innovative business.
National projects

1. Tabbin Technology Incubator


2. Assiut Technology Incubator


3. Banha Technology Incubator


4. Mansoura Technology Incubator


5. Dueka Virtual Incubator


6. Tala Business Incubator


7. Mansoura Business Incubator


8. Mobarak Information Technology Incubator


9. Mobarak Biotechnology Incubator


10. Entrepreneurship Development Course

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