Morocco Vs. Egypt:
The paradox of innovation north african
Several observers believe that the future of innovation will be African. International investment funds have the radar on promising countries in terms of innovation.
In North Africa, Morocco tops the ranking of the Global Innovation Index (GII). However, it is Egyptian startups that are winning the overwhelming majority of investments. Let’s decipher this paradox!
A more efficient innovation system in Morocco
Published by WIPO, the Global Innovation Index rates 132 economies in terms of innovation capacity. In 2022, Morocco occupies the 67th place, ahead of 10 positions Vs. 2021. Egypt gains 5 positions and ranks 89th. Morocco is thus the leader in North Africa, followed by Tunisia and then Egypt.
Morocco owes its performance notably to spending on education, filing of industrial designs, high-tech industry, and the export of ICT services. The obstacles identified mainly concern the level of supervision, the low level of joint ventures and logistics performance.
For Egypt, it is the development of clusters, productivity, market size, diversification of industry and venture capital that constitute the strong points of the country. What pulls down are rather the level of investment, the expenditure on education, the cost of dismissal, or even the attractiveness of science and engineering studies. Egypt is ahead of Morocco in terms of start-up financing 41st Vs. 59th.
It should be noted that this global index measures the overall innovation environment in terms of infrastructure, employment, scientific publications, the activity of large companies, etc.
Source: Global Innovation Index 2022
A more attractive entrepreneurial scene in Egypt
The Moroccan entrepreneurial scene has seen the creation of several innovation hubs. This momentum was boosted by the launch of the 700 million dirham Innov Invest state fund in 2017. According to a report by Briter Bridges, Morocco has more than 200 active startups, 60 innovation hubs and 55 investors.
Moroccan startups were able to raise $29 million in 2021 according to the Techcabal platform. A historical record certainly, but which represents 6% of the funds raised by Egypt. The latter is part of the African top 4 with Nigeria, South Africa and Kenya.
Egypt has 562 Startups according to the Disrupt Africa report. They evolve in an ecosystem with more than 120 investors. 491 million dollars were raised in 2021, growing 179% compared to the previous year.
This Egyptian prowess might be explained by several reasons:
• Large domestic market (104 million inhabitants vs 37 million in Morocco)
• Larger pool of startups
• State support for FinTech (regulation, financing)
• Use of English allowing more openness to international investors
To be retained
Morocco is gradually improving its socio-economic indicators creating an environment conducive to innovation. However, everything remains to be done to enter the top 5 African countries in terms of attractiveness and development of the startup ecosystem.
Sources :
https://www.wipo.int/edocs/pubdocs/en/wipo-pub-2000-2022-section1-en-gii-2022-at-a-glance-global-innovation-index-2022-15th-edition.pdf
https://briterbridges.com/north-africa-innovation-and-investment-report
https://techcabal.com/2022/01/03/heres-why-startup-funding-in-the-maghreb-ecosystem-is-low/
https://disruptafrica.gumroad.com/
Blog article, by Samia EL Hanchi/ Master II Electronic Commerce Unistra/Edge, Casablanca, Morocco
