As part of IFPRI Egypt Seminar in partnership with the Egyptian Center for Economic Studies: "Unleashing Untapped Potential of Industrial Clusters in Egypt"

1. To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017
E g y p t
M A K A R Y C O N S U L T I N G
Mapping of Organic Clusters in Egypt
“Support to Micro, Small and Medium Enterprises in Organic
Clusters Project”
December, 2017
Conducted by: In Cooperation with:

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Contents of the Presentation
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1.Purpose of the Study
1.Key Activities
1.Definition of Organic Clusters
1.Cluster Mapping Approach
1.Cluster Mapping Results
1.Cluster Selection Approach
1.Cluster Selection Results
1.Conclusion/ Recommendations
The Developed Egyptian Cluster Map
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017
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What is the Economic & Social Importance of Clusters?B.
• Maximize economic impact through value added, productive jobs, and foreign exchange
creation (direct & indirect) to reduce probability of shrinkage due to encountered
challenges;
• Preserve the local Egyptian culture, history and/ or authenticity.
Why Mapping Study?C.
• A powerful tool to access relevant information and improve knowledge/ data accuracy on
(informal) organic clusters in Egypt (essence of development) towards better decision
making.
Is The Study Enough?D.
• The first step in the road map for developing organic cluster map in Egypt and for future
cluster(s) support and/ or development.
A. What Are Organic Clusters?
• Cluster is defined as a group of enterprises producing same or similar products, situated
within a geographical area spanning over a few villages, a town or city, and facing common
opportunities and threats.
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017
1. Purpose of the Study

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1. Purpose of the Study (Cont’d)
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Produce an interactive updatable map of organic clusters in Egypt.
Recommend a representative list of six potential organic clusters
(i.e. 3 in Lower Egypt and 3 in Upper Egypt) to be targeted by
relevant stakeholders, and assess their needs in terms of
financing, business development services, capacity development
activities, and key required interventions.
Capacity building to a team from SFD in field activities and mapping
process in order to build and develop their capacity in cluster mapping
and selection.
Cluster
Mapping
Cluster
Selection
Capacity
Building
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017

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2. Key Activities
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 Definition (process oriented);
 Sequential clusters’ replicable identification, mapping & selection
methodology;
 Updating & upgrading map (capacity building).
 Identified 193 concentrations of which 145 are organic clusters;
 Collected statistical data on 145 organic clusters in 27 governorates
covering 9 sub-sectors;
 Presented data on simple, user friendly, interactive map;
 Ranked 145 clusters by potentiality;
 Recommended 6 potential clusters (related to SFD OCP).
Activities
Approach
Output
 Review of local & international experiences;
 Intensive field work all over Egypt;
 Contacts with around 300 stakeholders.
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017

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3. Organic Cluster Definition
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Organic
Initiated and/or expanded without governmental planning/
interventions.
Industrial
Production oriented only, i.e. agribusiness, handicrafts and industrial,
and do not include service, creative, agricultural and natural resources
clusters.
Clusters
Geographical
Concentration
In geographical proximity to each other, i.e. within the same city/ village.
Interdependent Nature of the cluster (vertical/ horizontal/ large enterprise centered).
Distinct Characteristics
Competitive or “popular” on the basis of specific characteristics in
products (such as low prices, high quality, innovative or customized
products, green industries…etc.).
Products Beyond
Regional Concentration
Clusters sell products beyond the district level.
Contribution of MSMEs Composed of MSME enterprises with similar/complementary activities.
Critical Mass
Should consist of a minimum of 30 productive units/enterprises or
employees.
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017

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“Organic Clusters” are defined as industrial interdependent concentrations,
located in a geographical proximity, developed and/or expanded without
government planning/intervention, producing similar or complementary products
with distinct characteristics or competitive edge, having the experience or
capacity to sell beyond their geographic boundaries, and with a minimum of 30
enterprises/employees.
3. Organic Cluster Definition (Cont’d)
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017

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4. Cluster Mapping Approach (Stage 1)
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CapacityBuilding
Phase Activities Tools Output
Research Desk Research
Analysis of international
best practices and local
initiatives
- Initial Organic Cluster
definition
- Mapping approach
- List of stakeholders
Data
Collection
Collection of data
relevant to identified
clusters
• Specific stakeholders’
questionnaire (Layer 2)
• Clusters’ questionnaire
(Layer 3)
- Confirmed list of
organic clusters +
aggregate data
collection & analysis
Cluster
Identification
- Research on industrial
concentrations
- Building list of clusters
• Location Quotient
• General stakeholders’
questionnaire (Snow Ball)
(Layer 1)
- Preliminary list of
clusters + general data
collection
Data
Presentation
IT Tool (Cluster Profile)
- Develop interactive
updatable map
- Design & construct map
- Data entry on map
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017

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5. Cluster Mapping Results
145 Organic
Clusters
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017
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9 9
8
7 7 7
6 6 6 6
5 5 5
4 4 4
3 3 3 3 3
2
1
0
2
4
6
8
10
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14
16
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OC Distribution by Governorate

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Agribusiness (17)
Food (31)
Wood (14)Textile (46)
Chemical (3)
Metal (8)
Mining &
Construction (18)
Paper & Printing
(2)
Leather (6)
OC Distribution by Sector
5. Cluster Mapping Results
145 Organic
Clusters
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017

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6. Cluster Selection Approach (Stage 2)
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CapacityBuilding
Phase Activities Tools Output
Cluster Selection
AHP Model (on basis of
mapping data)
Develop screening
criteria & application
on identified clusters
- Ranking of clusters
- Shortlist of 10
clusters
Detailed Data
Collection
Gathering further
data on shortlisted
clusters.
Further field work with
shortlisted clusters
(Layer 4)
Assessment report for
10 clusters
Cluster
Recommendation
Develop fine-tuned
selection criteria
AHP Model (on basis of
further survey)
List of 6 potential
clusters for
development
Needs
Assessment
Further field work with
the recommended
clusters (Layer 5)
Initial assessment
reports for the
selected 6 clusters
In-Depth Analysis &
Assessment
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017

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Criteria Ranges of Answers & Their Score
A. Sustainability (40.3%) 1 2 3
A.1. Alignment with Governmental Policy
(12%)
Low Medium High
A.2. Seasonality (8%) Random Seasonal All Year Long
A.3. Challenges & Negative Social &
Environmental Impact (8%)
Challenges with
High Impact
Challenges with
Moderate Impact
Challenges with Minor
Impact
A.4. Nature of the Cluster & Linkages
Existence/Potentiality (5%)
Weak Linkages Moderate Linkages High Linkages
A.5. Export Contribution (4%) below 10% 10% - 30% 30% +
A.6. Presence of Support Firms (3%) No Support Firm One Support Firm More Than One Support Firm
B. Size / Importance of the Cluster (33.9%)
B.1. Total Number of Workers (14%) Below 30 31 - 500 500+
B.2. No. of Productive Units (11%) below 30 31 - 500 500+
B.3. Income Level (9%) Low Medium High
C. Cluster Specific Preferences (25.8%)
C.1. Percentage of MSEs (10%) Below 30% Between 30 - 70% Above 70%
C.2. Percentage of Female & Youth (8%) 0% - 19% 20% - 50% 50% +
C.3. Percentage of Formal Enterprises (8%) 0% - 19% 20% - 50% 50% +
6. Cluster Selection Approach (Cont’d)
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017

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Region Governorate Cluster Rank
Lower Egypt
Damietta ‫لألثاث‬ ‫دمياط‬ ‫تجمع‬ 1
Cairo (including Helwan) ‫القاهرة‬ ‫مدابغ‬ ‫تجمع‬ 2
Kafr El Sheikh ‫اليدوى‬ ‫للكليم‬ ‫فوه‬ ‫تجمع‬ 3
Gharbia ‫لألثاث‬ ‫كتامة‬ ‫تجمع‬ 4
Damietta ‫دمياط‬ ‫حلويات‬ ‫تجمع‬ 5
Upper Egypt
Fayoum ‫تجمع‬‫قرية‬‫الخزف‬ ‫لصناعة‬ ‫تونس‬ 1
Luxor ‫األلباست‬ ‫من‬ ‫الخزفية‬ ‫للصناعات‬ ‫القرنة‬ ‫تجمع‬‫ر‬ 2
Sohag ‫اليدوى‬ ‫للنول‬ ‫الكوثر‬ ‫تجمع‬ 3
Qena ‫الحرير‬ ‫لمشغوالت‬ ‫نقادة‬ ‫تجمع‬ 4
Assiut ‫العديات‬ ‫ببنى‬ ‫اليدوى‬ ‫الكليم‬ ‫تجمع‬ 5
7. Cluster Selection Results
 Sakiet Abu Sha’ara Cluster for Handmade Carpets was excluded from the
selection since SFD started a diagnostic study on it before the mapping study.
SFD conducted further studies and initiated development under the OCP in 2 of
the 6 recommended clusters, i.e. Furniture Cluster in Damietta and Hand-Made
Kilim Cluster in Fowa.
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017

14.  The map is the first step towards and a key initial stone in the development of a
cluster map site to be accessible by key cluster stakeholders and a selection tool
for future cluster development.
 The next step is to seek policy initiations in line of the following:
1. Develop a common definition for organic cluster to be applied;
2. Identify a mechanism for cluster development and management;
3. Exchange experience, data and unify all the efforts for the benefit of cluster
development in Egypt;
4. Initiate support/ strategy for key recommended clusters and help them
overcome their challenges.
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8. Conclusion/ Recommendations
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To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017

15. The following observatories/maps are reviewed and analyzed:
The Egyptian cluster map is inspired by and builds on the different
international cluster observatories reviewed, as follows:
o Enhanced intuitive filtering mechanism (similar to India, Canada,
and Japan);
o Few clicks to get a cluster profile (similar to Japan and India);
o Full interactive map (similar to Europe);
o Simple and user friendly.
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To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017
9. The Developed Egyptian Cluster Map

16. 9. The Developed Egyptian Cluster Map (Cont’d)
The aim of the Egyptian cluster map is to provide a quick and easy way to:
 Locate clusters by governorate and by sector;
 Understand basic information on clusters and their production;
 Identify clusters’ needs and challenges, and hence identify development
priorities;
 Locate clusters with specific features to be consistent with objectives of
programs such as high percentage of informal companies (mostly helpful to
the government), high export potentiality, hence higher possibility to
contribute in economic growth and/ or high potentiality in creating jobs;
 Initiate future collaboration for data exchange in order to update the map.
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E g y p t
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To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017

17. THANK YOU FOR YOUR ATTENTION!
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017
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Reviewed
Countries
USA
Serbia
Romania
Europe
India
Canada
Bangladesh
Japan
International Local
Programs
CCI -
UNIDO
ATA -
USAID
Zaytun
Project -
USAID
Leather
Program
EEDP -
CIDA
Poultry -
UNIDO
EPALM -
UNIDO
EMAP -
UNIDO
SME Dev. –
Egyptian Gov.
OC Project -
AfDB
MDG-
F
IMC Cluster
Program
SICDP
- IMC
To Conduct Mapping of Organic Clusters for Upper and Lower Egypt, December 2017