Sitting in his brand new, sprawling office tucked in an upscale neighborhood in the crowded capital, Mostafa Hemdan says he has not yet finished his final year at university, where he learned the basics of how to start a business.
Now, as the CEO of RecycloBekia, which employs 24 people and recycles electronic waste, Hemdan believes entrepreneurship is key to Egypt’s development – and he says a program that encouraged students to create their own company was vital to getting his company on its feet. Hemdan and his team won a business competition held at his public university that included mentoring about how to succeed in the private sector.
“I had no idea about anything in business,” says Hemdan, noting that he also learned a great deal from information online. “But if no one gave me the inspiration to start, I think I wouldn’t have started.” At 22, Hemdan believes youth should learn about entrepreneurship.
Although presently limited in its reach, entrepreneurship education is on the rise in some public as well as private universities. Despite numerous challenges, entrepreneurship is spurred by attitudes of young people who are shifting from positions of reliance to ownership in post-revolution Egypt.
“At the public university level, this is a very new concept,” says Dina El Mofty, executive director of Injaz Egypt, which brings entrepreneurship programs – like the one that sparked Hemdan’s success – to schools and universities nationwide. “In private universities, this is becoming popular.”
Interest in entrepreneurship education at the university level has grown over the past five years and is often viewed as a solution to problems surrounding Egypt’s economy and a decrepit education system that is off-kilter with developments in society such as the shift from industry to technology.
Education in Egypt is lagging behind, says Shahinaz Ahmed, CEO of Education for Employment-Egypt, a non-governmental group. “Therefore it’s not able to find the capacities needed for industry growth, for social development, for innovative changes,” she says. “The government, young people and the private sector operate with very different mindsets. It’s almost as if they live in different eras of history and they speak very different languages.”
Desire for sustained change in a nation where 300,000 students graduate each year – many with no prospects for employment – led to the creation of the Entrepreneurship and Innovation Program at the American University in Cairo’s (AUC) School of Business in October 2010.
Since the program began at the private university, more than 5,000 people have participated in entrepreneurship awareness programs, according to data provided by Sherif H. Kamel, dean of the business school. More than 2,000 youth have competed in the university’s start-up competitions and received training in entrepreneurship and small business management. More than 40 educators and professors have been trained on how to design and deliver entrepreneurship courses.
David Kirby, founding dean of the Faculty of Business Administration, Economics and Political Science at The British University in Egypt, also saw need for change when he arrived here in 2007.
“When I talked to employers about employment opportunities they said, ‘Well, we can’t get good graduates,’” Kirby says, “not because universities aren’t producing graduates. They are, but not the right type.”
“What employers are looking for often are creative problem solvers, innovators, people who can use their own intuition, work by themselves, in teams,” Kirby says, noting these are characteristics of entrepreneurs.
Kirby and Kamel, however, say it is still too soon to measure the extent to which this kind of education works in Egypt. Students who have taken entrepreneurship courses at the British and American universities have created businesses, but they’re small in number, Kirby says.
There are, however, other signs of the programs’ success. More than 400 youth presented ideas at a 2012 national business competition, Fekrety, sponsored by AUC’s business school in cooperation with Intel. Forty percent of those ideas are now start-ups in the making, Kamel says. While not all of those are registered companies, they have completed business plans, staff is in place and they are seeking seed funding.
It also seems attitudes of youth have changed in the post-revolution period, which may partially account for the surge in start-ups since the uprising that toppled dictator Hosni Mubarak.
“If you were following the incredible number of start-ups that started post-January 2011, it’s unreal,” Kamel says. “It’s logical that during this time people would adopt the wait and see policy, but that’s not the case.
Before the uprising young people with good ideas would look at their situation and say, ‘Somebody is taking care of us,’ says Kamel, who sees growing sentiment that it is time to focus on the private sector. “But after that, people have a sense of empowerment, ownership.”
While that may be true, some are skeptical entrepreneurship can be taught with successful outcomes given Egypt lacks an ecosystem conducive to business.
“My question is: What are the results?” asks Ahmed, of Education for Employment. “How much money is spent, and what is yielded?”
Hadia Hamdy, acting department head of innovation and entrepreneurship at the German University in Cairo, another private institution, says only 10 percent of the potential she sees among her students is applied, and that the No. 1 reason for this is culture.
“Even those who like to dream big, change their path, are usually hit by the parents, the family, and everyone not encouraging them,” says Hamdy, also a consultant for entrepreneurship at the Bedaya Center for Entrepreneurship and SME’s Development, part of Egypt’s General Authority for Investment and Free Zones.
Hemdan of RecycloBekia faces opposition from his mother, who says Hemdan shouldn’t waste his time and instead complete his final year of university. Experts say parents try to push their children away from risk associated with self-employment and toward job stability, and that many youth also seek such stability, often in the government.
Moreover, entrepreneurs and business leaders are not portrayed favorably in Egyptian media, frequently painted as malicious or corrupt.
“We need to celebrate innovation, celebrate entrepreneurship, in the media in the press… Tell people that entrepreneurs are good people,” says Ramez Mohamed, CEO of Flat6Labs, which provides technology startups support to get off the ground and face challenges of global and local markets.
These aren’t the only challenges. Various laws, regulations and bureaucratic processes make it difficult for businesses to start. Closing a company is also a very long and exhausting process, among other obstacles, Mohamed says.
Yet, interest to teach students entrepreneurship grows, even in state universities where there is often little movement because of governmental constraints and financial limitations.
Academics like Riham El Saidi, a lecturer in the Business Administration Department in the Faculty of Commerce at Ain Shams University, a public institution, seek alternatives at a time of other structural and curricular change. With a set of researchers, El Saidi is starting a center to support entrepreneurship and small and medium-sized businesses (SME’s), which she hopes will open this summer.
“The students don’t know what entrepreneurship means,” says El Saidi.
But outside governmental approval is needed to start the center and the government offers no support. So it may rely on partnerships with non-governmental groups or student unions, El Saidi says.
But it is unclear how effective such centers are, when activities are not part of the curriculum.
Entrepreneurship should pervade the whole organization, the British university’s Kirby says. “It’s no use teaching students how to be entrepreneurial in a non-entrepreneurial environment.”
Last year, Cairo University, a public institution, opened an entrepreneurship and SME center, although it got off to a slow start due to logistical, political and leadership problems, says Mohamed Shohaib, a business-administration professor and head of the center. Its influence is currently limited to activities such as an entrepreneurship-awareness event held last week, reaching about 200 students.
“We are aware of the importance of this field,” says Shohaib, who hopes to eventually offer a major in entrepreneurship, but noted that changes are slow.
In the mean time, various organizations including Injaz Egypt seek to fill the gap by offering entrepreneurship classes, competitions and events at public universities.
The United States Agency for International Development is one of those groups. Its Global Entrepreneurship Program is a $2.5-million project to be conducted over two-and-a-half years and provides assistance to Egyptian entrepreneurs to start, grow, and access financing. An additional amount of approximately $1.5-million is planned to support entrepreneurship education projects in 2013.
“Economic studies as well as experience in the United States and in many other countries have shown that fast growing entrepreneurs can be a major driver for job growth in a country,” says Mary Ott, USAID Mission Director, in an e-mail.
But in order for that to happen, Hemdan, who now mentors aspiring entrepreneurs, said young Egyptians need ambition more than anything. He spoke as his company prepared to send 16 tons of electronic waste to Germany, a tangible sign that his business is growing. “Starting a business is not easy,” he says, “you have to be patient.”