Egypt has show how the modern connected complex world has become more fragile, reports Ged Carroll.
There is a lot of focus in the analysis about the overthrow of president Hosni Mubarak of Egypt about the impact of the internet. One thing that people like the OECD looked at was the cost of the internet being turned off. Researchers at the OECD estimated that this cost Egypt about $18 million per day or 3-4% of gross domestic product (GDP).
However, this calculation only scratches the surface as telecommunications permeates every part of global commerce. For instance Forbes magazine highlighted the impact that the internet blackout had on IT outsourcing and call centres – a major source of economic growth and jobs for Egypt. One example of a company hit by the outage was Vodafone New Zealand who had to assemble a temporary call centre with 100 workers to cope with having an Egyptian call centre having been cut off.
What can’t be measured is the future effects that this may have had on inward investment in future outsourcing operations to Egypt. The outage would have also disrupted industries such as travel and tourism since hotels, car hire businesses and airlines couldn’t receive online bookings.
According to the CIA World Factbook, Egypt’s agricultural sector accounts for 13.5% of GDP and employs almost a third of the Egyptian workforce. For export-orientated agricultural businesses being connected to customers’ electronic ordering systems is now a crucial part of their business.
Businesses like Tesco use what is known as an EDI (electronic data interchange) system to manage orders and their supply chain carefully to ensure that the right product arrives in the right condition and at the right time. Disconnecting Egyptian agricultural businesses would have had a direct economic impact on many of the country’s rural poor.
Egypt has show how the modern connected complex world has become more fragile, and there is already a body of academic work that supports this view. What needs now to be done is to understand how this should change the way a government approaches both economic and foreign policy.
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