Social Fund for Development

To Prepare and Deliver Multi-Stakeholder

Dissemination Workshop
(Final Report)

May, 2016
 Preparation

Name of Project: To Prepare and Deliver Multi-Stakeholder Dissemination Workshop

Abbreviation: Organic Clusters Dissemination Workshop
Client: Social Fund for Development (SFD)
Date: May 15th, 2016
Version: Final Report

Team Leader: Dr. Samir Makary

Project Manager: Lamy Makary

REVISION DATE DESCRIPTION PREPARED BY (AUTHOR) REVIEWED BY

Lamy Makary
1 15/5/2016 Final Report Liana Lotfy
Samir Makary
Document no.: 21N.3.2.16 /S/E

Disclaimer

This report has been prepared for the sole benefit of the client. Neither the report nor any part of the report shall
be provided to third parties without the written consent of HLB Egypt-Makary Consulting. Any third party in
possession of the report may not rely upon its conclusions without the written consent of HLB Egypt-Makary
Consulting. Possession of any HLB Egypt-Makary Consulting model does not carry with it the right of publication.

HLB Egypt-Makary Consulting conducted this analysis and prepared this report utilizing reasonable care and skill
in applying methods of analysis consistent with normal industry practice. All results are based on information
available at the time of review. Changes in factors upon which the review is based could affect the results.
Forecasts are inherently uncertain because of events or combinations of events that cannot reasonably be
foreseen including the actions of government, individuals, third parties and competitors.

HLB Egypt-Makary Consulting is a member of HLB International. HLB International is a world-wide network of
independent professional accounting firms and business advisers, each of which is a separate and independent
legal entity and as such has no liability for the acts and omissions of any other member. HLB International
Limited is an English company limited by guarantee which co-ordinates the international activities of the HLB
International network but does not provide, supervise or manage professional services to clients. Accordingly,
HLB International Limited has no liability for the acts and omissions of any member of the HLB International
network, and vice versa.
CONTENTS

1 THE CONFERENCE ........................................................................... 1

2 RECOMMENDATIONS ....................................................................... 2
ADVOCATE COMPETITIVENESS OF ORGANIC CLUSTERS IN EGYPT...................................2
AGREE ON COMMON DEFINITION OF “ORGANIC CLUSTER” IN EGYPT (TAKING THE
DEFINITION IN THE MAPPING STUDY AS AN INITIAL STEP) ......................................................3
DISCUSS SUITABLE INSTITUTIONAL SETUP/ MANAGEMENT MECHANISM FOR FUTURE
CLUSTER SUPPORT......................................................................................................................3
DISCUSS WAY FORWARD TOWARDS UPGRADING/ UPDATING ORGANIC CLUSTERS MAP
OF EGYPT ....................................................................................................................................4
DISCUSS WAY FORWARD FOR COLLABORATION TOWARDS FUTURE CLUSTER
DEVELOPMENT, AS PART OF NATIONAL INITIATIVE IN EGYPT .................................................5

3 ANNEXES.......................................................................................... 8

LIST OF ANNEXES
Annex 1: Conference Agenda ................................................................................................................................ 8
Annex 2: Registration Sheet .................................................................................................................................. 9
Annex 3: Selected Photos from the Conference .............................................................................................. 25
ABBREVIATIONS

AFDB African Development Bank

IT Information Technology
NGO Non-governmental Organization
SFD Social Fund for Development
SMEs Small and Medium Enterprises
1 THE CONFERENCE
The “Knowledge Sharing Conference for Cluster Development Stakeholders in Egypt” took place
on Tuesday May 10th, 2016 at Nile Ritz-Carlton Cairo Hotel. The conference consisted of an
opening session by SFD and AFDB top management, followed by three other sessions presenting
different studies conducted by SFD, and a closing session for policy recommendations, as shown
in the agenda attached as Annex 1.

There were around 154 participants (registration sheet attached as Annex 2) representing
different institutions: governmental, public, private, international donors, and individual experts.
These participants were all concerned with cluster development in Egypt from different aspects
such as finance, training, statistics agencies, and export promotion.

In their introductory speeches, SFD Managing Director, Mrs. Soha Soliman, and AFDB Resident
Representative, Mrs. Leila El-Mokaddem, highlighted the importance of clusters to Egypt and
their impact on its economy, the different aspects to be considered in their development, and
the importance of uniting different objectives and having a policy dialogue with the government
through different means such as this conference. Furthermore, Head of Non-Financial Services
Sector at SFD, Dr. Raafat Abbas, and AFDB Task Manager, Mrs. Gehane El-Sokkary, highlighted
the challenges facing clusters and the importance and need for their development, and
emphasized the importance of stakeholders’ cooperation under a national initiative for cluster
development in Egypt. Initial feedback on the conference was positive and participants agreed
on the importance of the results presented during the conference as well as their cooperation for
the best interest of clusters. Selected photos from the conference are attached as Annex 3.

Organic Clusters Dissemination Workshop 1 SFD

Final Report May, 2016
2 RECOMMENDATIONS
These policy recommendations were discussed in the conference, subsequent to the organic
clusters mapping, cluster development best practices and diagnostic studies in carpet clusters,
in order to foster development of a map and future cluster development in Egypt. Policy
recommendations are classified by key issue.

ADVOCATE COMPETITIVENESS OF ORGANIC

CLUSTERS IN EGYPT
Proposed activities;

1. Foster collaborative work between cluster members and encourage them to cooperate
together in order to increase competitiveness and productivity and decrease cost. This
could be achieved through the following for each cluster:
 Common transportation systems;
 Common procurement of raw materials in order to reduce their cost of production
and gain access to higher quality of raw material.;
 Common branding to help access more marketing channels and sell products locally
and abroad.

2. Brand local produce to reflect authenticity and initiate awareness campaign to promote
the clusters’ products, as pride to the Egyptian manufacturing and culture.

3. Raise awareness about the importance of quality control for clusters’ products and adopt
a quality scheme to implement enhanced quality control measures and monitor their
application.

4. Management bodies/ stakeholders should develop action plans for clusters in order to
raise their market knowledge, an example for this is to provide them with indicative
pricing schemes to adopt for their products. This would help cluster members focus on
increasing their competitiveness and stop focusing on competition between them.

5. Improve and increase available sources of raw material, with special reference to those
serving different areas, in order to increase the product quality (such as sheep breeds for
wool and mulberry and other projects for silk – serving Saqiet Abou Sha’ara, Akhmim and
Naqada).

Organic Clusters Dissemination Workshop 2 SFD

Final Report May, 2016
 AGREE ON COMMON DEFINITION OF “ORGANIC
CLUSTER” IN EGYPT (TAKING THE DEFINITION IN THE
MAPPING STUDY AS AN INITIAL STEP)
Proposed activities;

1. Open dialogue amongst stakeholders to agree on a common definition of “organic

cluster”.

2. Draft the definition as a law to be applied by all stakeholders.

DISCUSS SUITABLE INSTITUTIONAL SETUP/

MANAGEMENT MECHANISM FOR FUTURE CLUSTER
SUPPORT
Proposed activities;

1. Promote national initiative for cluster development in Egypt to be well represented by

key stakeholders which are connected with the different clusters.

2. Initiate permanent institutional management setup/governmental body (could be under

the ministry of industry, trade and SMEs) concerned with cluster development from
different aspects, clusters and their problems, to ensure engagement/participation of
key stakeholders and coordinate their efforts, in addition to the importance of enhancing
the role of existing bodies.
 In this respect, the institution “doing the job”, i.e. implementing cluster
development initiatives, should be different than the institution “sharing and
learning from it”, i.e. monitoring, evaluation and knowledge dissemination. And
hence, if stakeholders implement the initiatives, the suggested body should ensure
sharing and learning from them.

3. There are different cluster development models to choose from (i.e. value chain, cluster
development, and network development). The most appropriate should be chosen in
light of the environment in Egypt, or a combination could be tailored from the three
models.

4. Construct and regularly update a list of stakeholders to be classified by national,

international and regional level, type of activities/ services/ support provided, active to

Organic Clusters Dissemination Workshop 3 SFD

Final Report May, 2016
 less active and from general to more specific stakeholders, so each layer will be involved
in different discussions or policy levels.

5. Promote significant contribution of private sector in cluster development initiatives

through collaborative process involving large companies, teaching and research
institutions, individual local and international experts, and NGOs, to cooperate with
government at multiple levels.
 In this respect, the private sector is more efficient in implementing cluster
development initiatives, but it is recommended that the government acts as a
facilitator as it is better in providing responsible products through ensuring better
living conditions and offering better chances to produce and supply;
 It is also recommended to design programs to guarantee minimum infrastructure,
health and living standards for clusters’ employees.

6. Improve institutional setup, draft laws and establish a clusters platform that would
enhance their enabling environment, especially in light of their high informality, and
propose specific economic incentives to attract clusters to the formal sector.

DISCUSS WAY FORWARD TOWARDS UPGRADING/

UPDATING ORGANIC CLUSTERS MAP OF EGYPT
Proposed activities;

1. Upgrade map from IT perspective to allow for more statistical analysis and upgradable
interface.

2. The map is the starting point towards better cluster development in Egypt, and hence it
is important to ensure its sustainability through the following:
 Allow accessibility to all stakeholders in order to update and increase level of data
accuracy, through an agreed body, and initiate and maintain data collection sharing
platform to be accessed by stakeholders and clusters (to complement the map), as
sort of information center/cluster observatory;
o Similar to other countries, it is recommended that this observatory be an open
observatory with the data copyrighted, i.e. copyright to update the data, but not
to access and use the data.
 Make the map accessible publicly for the benefit of cluster development by various
stakeholders and researchers;
 Continuous monitoring and evaluation of clusters and cluster development
initiatives.

Organic Clusters Dissemination Workshop 4 SFD

Final Report May, 2016
 3. The map should also be accessible as well to value chain members such as suppliers of
raw materials, in addition to the consultants and service providers.

4. Continuously review international best practices and cluster observatories in order to be

updated with new cluster identification and development means and practices.

It should be noted that the Consultant will keep hosting the map for one month, after which the
map will not be accessible to anyone other than the Consultant. It is therefore recommended to
speed-up the process of hosting the map from the part of the IT department at SFD.

DISCUSS WAY FORWARD FOR COLLABORATION

TOWARDS FUTURE CLUSTER DEVELOPMENT, AS PART
OF NATIONAL INITIATIVE IN EGYPT
Proposed activities;

1. Develop national sustainable cluster development strategy and long-term visionary plan/
roadmap for Egypt with collaboration of stakeholders and participation of clusters. This
should consist of practical solutions to be implemented on the ground rather than
theoretical ones.
 A suggestion is to work on 3 different levels consisting of the whole comprehensive
strategy: Vision  Initiatives  Programmes, and these should be developed and
implemented regardless of any government changes;
 Another suggestion is to have national programs for different sectors and then work
through them on clusters within each sector.

2. Coordinate efforts of stakeholders and donor programs to reach all clusters in different
governorates in Egypt, rather than focusing on few famous clusters and neglecting
others even if they are potential.
 A possible way to do this is through constructing contribution matrix of all existing
and potential stakeholders’ initiatives, with funding sources, timing,
implementation status and evaluation of results, by cluster, to be renewed every 3
years, in order to enable better planning, monitoring and evaluation, and
coordinate/complement efforts;
 It is suggested that each stakeholder focuses on development objectives related
to its mission and field of work (e.g. export, finance, marketing, training,…etc.).

Organic Clusters Dissemination Workshop 5 SFD

Final Report May, 2016
 3. Ensure adoption of sustainability measures in all interventions in order to guarantee their
long-term effect on clusters. In this respect, adequate exit plans for each intervention
should be developed.

4. Enhance knowledge of clusters about different aspects such as local and international
demand on their products, advanced production techniques, quality control measures,
available competition, pricing…etc., through improved dissemination channels of data
and information.

5. Establish/enhance market linkages and accessibility to local and international markets

through focused market research, increase and ensure participation in national and
international exhibitions, and national initiative for permanent retail outlets.

6. Facilitate access to finance to all SMEs and cluster members.

7. Strengthen cluster infrastructure and facilitate procedures for establishment of new

clusters.

8. Develop a national strategy for export support and promotion for different cluster
products.

9. Work on defining a governance system in clusters in order to ensure they are well
represented to external parties nationally and internationally.

10. Encourage Egypt’s participation in the international community of cluster development

through conference and sessions, as well as training missions abroad, in order to share
knowledge, benefit from the international community, and enter into mutual
agreements with them. This would be on two levels; the clusters themselves and the
experts/professionals who work with them (i.e. cluster development leaders/agents) to
drive the cluster development vehicle, especially the youth.

11. In this respect, cluster development agents in Egypt should be encouraged to learn from
other countries, but most importantly, clusters should also learn from each other and a
mechanism for knowledge sharing and relations between clusters should be established.

12. Speed-up development and implementation of cluster-related policies for the best
interest of cluster development.

Organic Clusters Dissemination Workshop 6 SFD

Final Report May, 2016
  It is recommended to undertake mapping of clusters in parallel with diagnosis of
pilot clusters (as actually done by SFD) in order for both processes to complement
each other and to learn from our mistakes throughout the development process.

Organic Clusters Dissemination Workshop 7 SFD

Final Report May, 2016
3 ANNEXES
Annex 1: Conference Agenda

Organic Clusters Dissemination Workshop 8 SFD

Final Report May, 2016
Annex 2: Registration Sheet

Organic Clusters Dissemination Workshop 9 SFD

Final Report May, 2016
Organic Clusters Dissemination Workshop 10 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 11 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 12 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 13 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 14 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 15 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 16 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 17 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 18 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 19 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 20 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 21 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 22 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 23 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 24 SFD
Final Report May, 2016
Annex 3: Selected Photos from the Conference

Organic Clusters Dissemination Workshop 25 SFD

Final Report May, 2016
Organic Clusters Dissemination Workshop 26 SFD
Final Report May, 2016
Organic Clusters Dissemination Workshop 27 SFD
Final Report May, 2016