Opportunity in Egypt

Cairo’s Tahrir Square during the Revolution via Wikimedia Commons

After the Egyptian Revolution of 2011, a man named his daughter “Facebook” in honor of the site’s mobile app and the role it played. On Twitter, #jan25 was trending for weeks, as Egyptians tweeted from their phones to report on the protests. Despite the government’s best efforts to cut off communications, protesters were able to organize through mobile technology. It’s clear that few places in the world have experienced such a dramatic impact of social networking and mobile technology, but why this happened and what will happen next are less apparent.

Why Egypt?
Around the globe (and, in particular, across Africa) there are plenty of leaders who have overstayed their welcome. Yet few have been hit with an uprising as intense and well organized as the one that brought down Hosni Mubarak. A quick reflection on a few indicators highlights three intriguing variables that influenced Egypt’s unique revolution:
Economy – Egypt boasts the second highest GDP in Africa. This might sound like a counter to revolution, but it takes a certain level of development for citizens to organize. As Paul Collier described in Wars, Guns, and Votes: Democracy in Dangerous Places it also takes a minimum income level for people to afford political activism. Egypt’s comparatively robust economy provided both. At the same time, affluence is very poorly disbursed. An estimated 22% of the population lives below the poverty line, a staggering 44% are illiterate, and less than 10% have bank accounts.[1] The dangerous divide is common across emerging markets and has long been fodder for uprising.
Infrastructure – In a continent that has seen the fastest adoption of mobile phones in the world, Egypt’s mobile penetration is over 90%[2] and sources expect that Egypt will reach 100% mobile phone penetration by 2013[3]. Paraphrasing Gil Scott-Heron, the revolution was not televised. In Egypt it was broadcast via mobile social networking platforms and Egypt’s telecommunication infrastructure ensured that over 70 million of Egypt’s nearly 84 million citizens could tune in.
Unemployment – Joblessness cuts three ways. First, it creates anger and desperation as people struggle to afford basic needs. Second, losing a job removes much of the recourse that dissuades people from illegal or banned activities. Finally, it provides the time to gather. In Egypt, nearly 9.4% are officially unemployed[4] and unofficial numbers are likely much higher. More importantly (in this scenario), nearly 90% of the unemployed are under 30 years old.
The confluence of a vast unemployed youth with existing infrastructure to coordinate undoubtedly played a role in the successful deposition of Mubarak. The same attributes are also creating a tremendous opportunity for entrepreneurs and impact investors to influence Egyptians’ success in rebuilding.
Where to Next?
The good news is that there is untapped potential for investment and development in Egypt. Despite relative economic wealth compared to its Sub-Saharan neighbors, many problems remain and investment in entrepreneurship, technology, and the country’s youth will shape the future.
Social entrepreneurs can harness the mobile technology that was so dramatically influential during the revolution to promote sustainable economic development and make lasting social impact. It’s proven that for-profit social enterprise can play a significant role in post-conflict resolution. As a study of post-war Bosnia-Herzegovina showed, business and workplaces contribute to community development and “rebuilding post-conflict societies” better than volunteer organizations[5].  Although traditional investors may find post-conflict areas too risky, the potential for impact investors to reap both financial and social returns is too great to ignore.
In Egypt, entrepreneurs have an amazing opportunity to create for-profit social enterprises that develop and distribute new mobile technologies, that combat the unique issues their fellow countrymen face. Illiteracy, unemployment, and financial access (click on the issues to see examples of mobile technologies that have been developed to combat each issue) all have benefited from the emergence of mobile devices. Both the need and the demand exist and thanks to the existing telecommunications infrastructure, the solutions already lie at the fingertips of 90% of Egyptians.

[1] http://thedailynewsegypt.com/banking-a-finance/transfers-ready-but-full-fledged-mobile-banking-to-take-longer-in-egypt.html
[2] http://www.egyptictindicators.gov.eg/en/pages/Publications/PublicationsDoc/Eng%20Flyer-April-%20last.pdf
[3] http://english.ahram.org.eg/~/NewsContent/3/12/14445/Business/Economy/Going-mobile-Egypt-gears-up-for-cellphone-banking.aspx
[4] http://data.worldbank.org/country/egypt-arab-republic
[5] http://pmpick.people.wm.edu/research/EthnicRacialStudiesPickering.pdf