Chapter 10

Formation of Agricluster on the Priority of

Including Small Farms: Case From Egyptp
Dina El Kayaly

Abstract
Micro-, small-, and medium-sized enterprise (MSME) sectors have a strong
influence on the Egyptian economy. Yet, effective formulation of integrated
cluster along the value chain can lead MSMEs to become international actors in
export-oriented activities. An Agro-Industrial Park is an integrated cluster
taking into consideration synergetic agglomeration of agribusiness MSMEs
assisting in decreasing deprivation of rural territories. This research aims to
present the needs of agriculture MSMEs in Egypt, to describe challenges faced
by this specific sector, and to set guidelines for a business model integrating
small farmers and producers into an integrated agribusiness cluster. The
researcher followed purposive/nonprobability sampling technique of 100
MSMEs research participants. A combination of questionnaires and
open-ended interviews were the research instruments of choice along with
secondary data. This research focused on agribusiness only and specifically
MSMEs in Egypt. There is no agribusiness-integrated cluster in Egypt, even
though the agricultural land increased significantly in the past 5 years, leading
us to believe that it is imperative to develop agribusiness-integrated clusters in
the coming few years.

Keywords: Clusters; regional development; SMEs; Egypt; agribusiness;

sustainability

Introduction
The broad objective of this research is to undertake research on development per-
spectives of an integrated agro-industrial cluster in Egypt. It aims at exploring the

p
A practicioner/white paper

Industry Clusters and Innovation in the Arab World, 281–308

Copyright © 2023 Dina El Kayaly
Published under exclusive licence by Emerald Publishing Limited
doi:10.1108/978-1-80262-871-520231013
282 Dina El Kayaly

challenges faced by agribusiness-related small- and medium-sized enterprises (SMEs)

in Egypt. This research contributes to our understanding of micro-, small-, and
medium-sized enterprises (MSMEs) in Egypt and highlights challenges in order to
present potential solutions that could help promote an enabling environment for
MSMEs to effectively contribute to the gross domestic product (GDP) of Egypt. The
research presents agribusiness industrial parks as one of the solutions to improve the
competitiveness of agribusinesses in Egypt. There is a serious need for more
specialized studies on this area, which will help in setting guidelines for business
models integrating small farmers and producers.

Role of MSMEs in Economic Progress

In all cultures, micro-, small-, and medium-sized companies (MSMEs) form the
bedrock of economic progress. They play crucial roles in the global economy, and
according to the United Nations Industrial Development Organization (UNIDO,
2007), MSMEs are the stout vehicles that contribute with fundamental support in
economic growth since they are key generators of employment and revenue across
the nations. Most countries acknowledge that MSMEs are seen as playing a
foundational role in supporting regional economic growth since they provide a
channel for a country’s resources to be mobilized, resulting in job creation and
income for the wider national economy (UNIDO, 2003). The current tremendous
business opportunities that open pathways for globalization, liberalization, and
accessing new potential markets put MSMEs in the face of fierce competition
amid tycoon firms and industries, which showcases that they are not the dominant
entities, but are essential in developing the individual economies (UNIDO, 2007).
According to Foghani, Mahadi, and Omar (2017), SMEs are essential to a chain
reaction of broad-based industrial growth. There might be some laid-back actions in
the industrial expansion in the developing nations in terms of widening the domestic
value, productivity, industrial connections, and employment rates if SMEs are not
present as suppliers of intermediate inputs to local large-scale enterprises (LSEs) and
multinational enterprises (MNEs). Although MSMEs are not the main players in the
global market, yet they are vital for the economic growth of individual countries since
they are by far the biggest category of economic organizations. Therefore, further
research studies on MSME are essential for the advancement of economics (Jan-
kowiak, 2013). Despite the fact that MSMEs frequently have more competitive
potential than giant multinational businesses, their competitive position is worse and
may lose opportunities for three main reasons that was mentioned by Jankowiak
(2013). Jankowiak talked about some pragmatic reasons related to lack of materials,
financial support, skilled labor, and R&D. He also mentioned that productivity
might be stifled by the size of the organization and that small- or medium-scale
“economic thinking” may be a major roadblock to capturing new goods, markets,
economic expansions, and new opportunities (Jankowiak, 2013).
Even though MSMEs might face difficulties and obstructions in their coun-
tries, they still may obtain significant advantages over their larger counterparts
due to having a simpler organizational structure, tighter contacts with customers,
and the ability to respond more flexibly to market developments and changes
(Janasová, Bobáňová, & Strelcová, 2017). With the combined power of small
 Formation of Agricluster 283

businesses, it is often possible to achieve meaningful results and contribute to a

community’s economic growth. A good illustration of this kind of collaboration is
a grouping of units working together toward a shared objective – known as
clusters.

Clustering and the Economics of Competition

The concept of a cluster has been widely known for ages and was defined by
various reputable entities, but this does not neglect that Michael Porter is the
initiator. A cluster is “a geographically proximate group of interconnected
companies and associated institutions in a particular field, linked by common-
alities and complementarities. The geographic scope of a cluster can range from a
single city or state to a country or even a network of neighboring countries”
(Porter, 1998; as mentioned in Jankowiak, 2013, p. 710). The cluster development
approach is defined by UNIDO (2013) as the gateway for economic development
prominence and drivers of venture innovation and economic expansion. In the
UNIDO (2013) context, clusters are defined as “geographical concentrations of
interconnected enterprises and associated institutions that face common chal-
lenges and opportunities,” which highlights that clusters have two main features:
they are formed of a large number of business enterprises that are all positioned
close to one another, and the businesses in each of these clusters have a lot in
common.
As defined by Foghani, Mahadi, and Omar, a cluster “is utilized to show a
geographical and a sectoral focus of firms which produce and sell a range of
related or complementary goods and services, and normally experience the same
challenges as well as opportunities. The clusters are assisted by a spectrum of
supportive institutions situated within spatial proximity including business-related
associations or technical or training service providers” (Foghani et al., 2017, p. 3).
Although many have come up with definitions on clusters, yet the existing defi-
nitions do not reflect on the enterprise sizes being part of the cluster. Simply put,
clusters mainly cover small family business firms in addition to those belonging to
the medium-sized enterprises that cooperate with the large transnational corpo-
rations. Examples of worldwide renowned clusters that acquired a competitive
edge and advantage in the international market while also generating local eco-
nomic growth are Silicon Valley cluster (California); the Australian and Chilean
wine cluster, and the information technology cluster (Bangalore, India) (Smyth,
1990, 1992).
Clusters may benefit from the dual contributions of MSMEs (Bylok, Pabian, &
Kuceba, 2016). To begin with, they may take the initiative to start a cluster, which
in turn helps the founding enterprises form the cluster’s core. The cluster’s
strategy and operations may then be shaped by the companies inside it. As a
second option, MSMEs can join clusters formed by bigger enterprises, which are
often transnational or worldwide businesses, as suppliers and cocreators of the
production chain (Foghani et al., 2017). However, the simple fact that firms are
geographically clustered is not a guarantee of great economic performance; in
284 Dina El Kayaly

other words, the benefits of clustering do not always manifest themselves imme-
diately. In the developing world, only a few clusters have been able to maintain
strong and sustained development rates. They are often caught in a vicious cycle
of cutthroat competition, stagnation, and poverty and are unable to make the
natural transition to innovation and progress (UNIDO, 2013). Here are some
examples of successful cluster in Table 10.1.
According to Gunawan, Jacob, and Duysters (2016) and Gunawan, Asyahira,
and Sidjabat (2020), through their face-to-face contact, copresence, and
colocation, clusters are commonly regarded as an efficient platform for the
low-cost sharing of expertise and local knowledge among cluster members.
Cluster collaboration provides a forum for the sharing of information and
experience among all members, but MSMEs stand to benefit the most.
Cluster-based enterprises and MSMEs mutually benefit in several functioning
aspects through sharing one or more of the following:

• Sourcing necessary inputs and suppliers’ raw materials especially when they
perform in a similar industrial sector. It can even help in minimizing waste and
improving sourcing methods.
• Having access to various forms of technological advancement options and any
needed specialized information through creating a different business model
such as outsourcing equipment, which in turn provides smaller businesses with
technology they would not normally have access to.
• Improving the company performance via measuring the metrics and placing
key performance indicators.
• Improving the company chances to get industry-specific finance.
• Tapping into experienced employees whereby it helps in minimizing the
recruitment costs.
• Strengthening the community ties that foster personal relationships with trus-
ted business members, which results in joint R&D expenses leading to a
competitive edge in the market.

To sum up, clusters may have a good impact on the economy by promoting the
growth of SMEs and fostering entrepreneurship, as well as increasing manufacturing
and exports (Boronenko & Zeibote, 2011; Delgado, Porter, & Stern, 2014; Sosnov-
skikh, 2017), which will lead to job creation, finding skilled labor force, enlargement
of the market opportunities, technology diffusion, and enhancing innovation.

The Link Between Agri-Industrial Clusters and Growth

of Agribusiness
One of the most crucial sectors in many nations is agriculture, which provides
food security while also helps to establish a new economy that is more techno-
logically advanced and resilient to external threats and catastrophes, such as
climate change or technology disasters. However, contemporary agricultural
production has considerable problems that may be solved by establishing new
 Formation of Agricluster 285

Table 10.1. Examples of Successful Cluster.

Country Description The Edge

The dynamic dairy experienced significant Collective efficiency:
products cluster in growth in the 1990s integration around natural
Boaco and Chontales, and is considered one resources linking livestock
Nicaragua (Rabellotti, of the developed owners, middlemen,
2006) clusters in the country producers of dairy
products, and traders
reaching end consumers.
Parmalat, a multinational
company, is also included
in the network as it
produces pasteurized milk.
Small fruit growers in Santa Catarina is a Supporting the region: The
Santa Catarina, Brazil leading apple producer state of Santa Catarina
(Rabellotti, 2006) supported the cluster in
many ways, e.g.,
established an institutional
relation with SMEs and
established an
experimental station for
SMEs among other
governmental support.
Salmon Farming in It is related to global Processing cluster: They
Southern Chile demand and there are went through three stages
(Rabellotti, 2006) few producers: till they reached global
Norway, Chile, and market. It is designed to
Scotland include all members of the
value chain.
Sports goods at Started on a high note Related to global value
Jalandhar, India and lost its position to chain: It serves the
(Nadvi et al., 2011) China and Pakistan. It international retailors.
consists of 150 firms
Sports goods at known for its Technology spillover: Use
Guangdong Province, large-scale of machine stitching
China (Nadvi et al., manufacturers who technology in football
2011) produce medium- to production and attracted
high-quality machine joint ventures or foreign
stitched balls firms owned by Hong
Kong or Taiwanese capital
to invest in the province.
Source: compiled by author (CASA, 2021).
286 Dina El Kayaly

clusters and strengthening existing ones, as long as their activities focus on

developing innovative competitive agriculture and rationally employing local
natural resource potential (Podbiralina et al., 2020).
Based on the report by the UN Department of Economic and Social Affairs
(2019), it was projected that the global population is estimated to grow to an
average of 8.5 billion in the year 2030, 9.7 billion in 2050, and 10.9 billion in 2100,
whereby in the year 2019, it was 7.7 billion. With the steady acceleration in
population growth, it is expected that food supply issues may aggravate unless
necessary measures are taken into consideration. Particularly, there is immense
need for strategies to improving food production in possible geographical loca-
tions using technologically enhanced machines, which may aid in significantly
increasing the degree of use of such finite natural resources as freshwater and
farmlands (Podbiralina et al., 2020).
As a result, it is worth noting that several research articles and ideas addressing
methodologies for identifying and recognizing clusters have been published. They
surely contribute to our understanding of the economic characteristics of clusters
and assist in predicting and analyzing likely future phases for cluster development
and evolution, notably in the agricultural production industry. Many researchers
such as Khukhrin and Bundina (2010), Falkovich (2014), Akopyan (2016),
Kostenko (2016), Abdiev and Toktorov (2017), Sizhazheva, Mirzoeva, Kumish-
eva, and Abanokova (2018), Kozonogova (2019), and Novikova (2019) studied
and investigated the major clustering directions in Russia’s agricultural and
industrial production, taking into consideration both the external and internal
factors. Despite this apparent intellectual maturity, Russia’s regions today have
just 11 agricultural clusters in operation (Podbiralina et al., 2020). Numerous
nations’ cluster projects reveal that cluster output increased significantly over the
twentieth century, contributing to the growth of the economy. Clusters have
existed for decades in several regions, such as the United States, the United
Kingdom, Japan, France, and other countries. As part of “innovation strategy,”
there is a mounting agreement that “cluster formation may become a tool for
promoting the countries’ even economic development and raising their competi-
tiveness through the creation of new growth centers” as an integral part of
“innovation policy” (EDB Centre, 2019, p. 3).
Comparing the functioning of clusters in Russia with those of other countries
helps determine their significance. Clusters in the agro-industrial sector are the
most common in Europe (especially in France, Spain, Greece, Denmark, and
Bulgaria), which may be ascribed to government support and a well-developed
cluster strategy. There are several examples, including the fact that the great
majority of European countries implement cluster policies via particular regional
cluster initiatives (such as those run by the European Union [EU]). The Pôles de
Compétitivité program in France, which has an annual budget of EUR 144
million; the Strength in Places Fund in the United Kingdom, which has an annual
budget of EUR 57 million; and various support programs in Germany, which
have an annual budget of EUR 45 million, are examples of countries that aid
clusters through a single program. To make the cluster programs work, a com-
bination of public and private funding (from European structural and investment
 Formation of Agricluster 287

funds, as well as various associations, foundations, and international organiza-

tions) contribute to their success. However, public funding (in the amount of
EUR 2.32 billion per year) is essential (European Observatory, 2019; as in
Podbiralina et al., 2020).

Agribusiness Trends
According to an article that was published in October 2021 by Investment
Monitor, there are several agribusiness trends that are expected to affect the
outlook, including:

• Agritech: It represents an assortment of technology advances applied in agri-

tech aiming to maximize output and efficiency while keeping prices low. If
implemented properly, it might have a significant impact on food waste and
agricultural sustainability (Leiva, 2021).
• Aquaculture: The Food and Agriculture Organization of the United Nations
found that between the years 1990 and 2018, aquaculture output climbed by
527%. Aquaculture is seen as a solution to provide a protein-rich diet to a
growing population without further damaging fish stocks (Leiva, 2021).
• Carbon sequestration: It is the act of storing carbon dioxide in agricultural soil
and may help offset emissions, whereas the ultimate objective should be to
decrease emissions. It is essential to increase carbon sequestration in the food
chain to improve soil health via sustainable agricultural techniques (Leiva,
2021).
• Plant-based foods: The plant-based foods market is predicted to develop at a
compound annual growth rate of 11.9% from 2020 to 2027. It is no secret that
the food business is experiencing a rise in start-up firms and established food
companies releasing vegan-friendly lines in the next years, and this trend was
expected to continue in 2021 (Leiva, 2021).
• Sustainability: According to Leiva (2021), most firms’ sights are focused on
developing a sustainable agricultural environment as the 2030 deadline for the
United Nations’ Sustainable Development Goals approaches. All parts of
agriculture may benefit from sustainability, making it more of a need than a
fad.

Knowledge as a Source of Competitive Advantage for Agribusiness Clusters

As mentioned in the article by Jednak, Kraguli, and Parežanin (2018), it is
possible to achieve development through several methods and techniques, one of
which may be dependent on knowledge. Knowledge, according to current eco-
nomic theory, is the driving force behind economic progress and advancement.
The company’s new products, processes, and organizational structure will benefit
from the knowledge that has been incorporated into them. Activities requiring a
high level of knowledge include education; research; the arts, media, and infor-
mation; and technology-enabled services. Education, knowledge, and human
288 Dina El Kayaly

capital all play a role in the development of the knowledge economy. Entrepre-
neurship and corporate development need transparency (Jeraj, Marič, Todorović,
Čudanov, & Komazec, 2015). Aside from education and science (R&D), infor-
mation technology has become an important factor in the growth of the economy.
Knowledge is broken down into three categories: creation (new research and
development), transmission (education and training), and transfer (exchange)
(diffusion of knowledge and innovation). Both the intake and the output of
knowledge are intertwined. Aside from that, knowledge is a return on the money
spent on R&D, education, and information technology. An output of knowledge
is the creation and improvement of services that are based on knowledge. It is
used to make new items and enhance the ones already on the market.
The goal is to create synergy among the cluster’s businesses and institutions via
a well-executed economic or business process. Supply costs are reduced, raw
material stock levels are reduced, and information is shared in a way that has a
direct impact on job creation and the skilled workforce (Boronenko & Zeibote,
2011; Delgado et al., 2014; Sosnovskikh, 2017; Sosnovskikh & Cronin, 2020).

Cases Studies of Clustering Efforts in Various Regions Around the World

Nowadays economy, knowledge, and innovation are the primary drivers of
progress. Porter (1998) said that clusters have a role in the formation of regional
economies. As a result of this idea, the cluster has emerged as a policy instrument
for achieving competitiveness and development in several nations (Jednak et al.,
2018). The following cases were selected to provide useful information to all
stakeholders on the virtues of developing an Agro-Industrial Park (AIP):

• AIP in EU Countries
To start with, currently, cluster development is at its maximum level in EU
member nations, but it is still at its lowest level in EU candidate countries. The
link between knowledge and cluster in EU candidate nations has the potential
to spur regional growth. While clusters and knowledge are included in the
development strategies of EU candidate nations, they do not seem to have a
substantial impact on the country’s competitiveness or growth. Nonetheless, to
close the gap and catch up with the EU, these countries established industry/
cluster policies to encourage collaboration among SMEs, government agencies,
universities, and research institutions to generate knowledge and innovations
that will increase the productivity and prosperity of regions and nations (Jed-
nak et al., 2018).
• AIP in Russia
Agro-industrial clusters in Russia are viable, according to Podbiralina et al.
(2020). Clusters have been found to be critical for places with agricultural econ-
omies because they foster the establishment of small- and medium-sized businesses
focusing on international markets, increase employment, and improve infra-
structure and the investment environment. “The study justifies the fact that
although agriculture – a strategic industry in many countries – faces constant
 Formation of Agricluster 289

external and internal threats, the solution is possible through the creation of new
clusters and improvement of existing ones, whose activities are aimed at devel-
oping innovative competitive agricultural production, taking into account the
existing natural resource potential” (Jednak et al., 2018, p. 9).
Additionally, the role of agro-industrial clusters in promoting and developing
innovative competitive agriculture (including increasing agricultural land turn-
over and improving the economic efficiency of their usage) is critical. It establishes
integrated ties between the private sector – including producers – and the gov-
ernment and a variety of other institutions and organizations (financial institu-
tions, research institutes, higher educational institutions, etc.). Agrarian-based
areas tend to benefit most from this kind of integration, since selling their food
products to both major companies and SMEs helps integrate these regions into the
national economy and improves the general well-being of the people. Another
finding was that the development of clusters based on small, innovative firms may
become an important topic of discussion in the future. There may be issues due to a
shortage of skilled employees and the need of developing new research topics and
research infrastructure, which demands not only knowledge and skills but also
investments and government backing. It is possible to alleviate these issues,
however, by increasing agricultural product supply both in Russia and abroad
(Ministry of Economic Development of the Russian Federation, 2008).
• AIP in Indonesia
Indonesia’s West Java province is one of the country’s most important agri-
cultural areas. Above four million people work in agriculture in Indonesia,
according to the Central Statistics Bureau of Indonesia. Most of West Java’s
farming subdistricts are found in the south; however, some may be found as far
north as the northwestern reaches of the island. There are more than 42,000
farmer groups (FGs) under the government’s authority in West Java, which are
associations of Indonesian farmers who specialize in a certain crop (Board of
Agricultural Extension of West Java, 2015). Government Decree No. 82/2013,
issued by the Indonesian Agriculture Ministry in 2013, says farmers should be
given the ability to work with other institutions and economic players, such as
buyers and producers, to promote collaboration among farmers. Farmers
engage with reliable partners to seek assistance for their own farms, exchange
knowledge about inputs and selling prices, and also aid each other with agri-
cultural work and as a social security network in the event that family members
are injured. They also work together to share production inputs including
equipment, tools, seeds, and fertilizers (Wardhana, Ihle, & Heijman, 2020).
According to research study done by Suhaili and Sugiharsono (2019),
MSMEs had a significant impact in labor absorption. This fact may
undoubtedly be a solution provided to the government to overcome the labor
imbalance by maximizing the potential of MSMEs in Indonesia, allowing the
unemployment rate to be as low as feasible.
• AIP in Japan, Korea, and Taiwan
Based on Foghani et al. (2017), Korea and Japan are two countries that have
many similarities. They have both focused on increasing the link between the
members of individual regional innovation systems to transform the innovation
290 Dina El Kayaly

systems into a holistic and operational block to promote knowledge dissemi-

nation and innovation. This, in turn, will hasten the dissemination of infor-
mation by encouraging innovation and value-added developments (Small and
Medium Enterprise Administration, Ministry of Economic Affairs, 2008). The
allocation of clear responsibilities to enterprises, governments, and universities,
as well as the distribution of essential resources, are critical components of
Japan’s industry cluster development strategy. This allows industry cluster
systems to evolve independently of government control.
The regional clusters’ collaboration and mutually supporting responsibilities
help to ensure that human talent, technology, and other resources are being
used efficiently at the same time. Finally, relationships between major corpo-
rations and small businesses must be strengthened, as well as efforts made to
encourage the formation of new businesses and the expansion of existing
businesses. A “virtuous cycle” of corporate growth is put in motion with this
strategy (Small and Medium Enterprise Administration, Ministry of Economic
Affairs, 2008). The effective development of open networks related to indus-
tries, governments, universities, and research institutions, as well as the for-
mation of “microclusters” that integrate these various sectors for the purpose
of strengthening innovation, has been the main determinant in the South
Korean development strategy of industry clusters. As a consequence of these
microclusters, a clear divide exists between the successful and less successful
industrial clusters (Small and Medium Enterprise Administration, Ministry of
Economic Affairs, 2008). As for Taiwan, it started in enhancing skills and
gaining a competitive edge by letting SMEs make up the majority of Taiwan’s
industrial clusters (Foghani et al., 2017).

Agri-Industry Parks: A Magical Solution for Africa

In the face of China and Southeast Asia’s (SE) competitive domination of global
manufactured goods markets, African manufacturing confronts significant
obstacles in expanding manufacturing activity. This influence manifests itself in
two ways: indirectly by impeding the expansion of African-manufactured exports
in third-country markets and directly by undermining African manufacturing
firms via cheaper Asian imports (Edwards & Jenkins, 2015; Kaplinsky, 2008;
Morris & Einhorn, 2008; Umezurike, Iwu, Obokoh, & Umezurike, 2017).
Another employment concern that must be addressed is the formal sector’s
limited ability to absorb labor. As a result, it is necessary to develop a more
inclusive way to synergize trade and economic growth, one that is more
employment intensive, is more decentralized, and allows for more activities by
indigenous and small-scale industries. This is not to argue against big enterprises
or Foreign Direct Investment (FDI) in economic development, but rather to urge
for a greater representation of indigenous small-scale firms in the economy and in
export commerce. We will now address the situation in Africa, beginning with the
following question: What role do SMEs and MSMEs play in economic devel-
opment? Most small businesses in Africa operate in sheds that provide little
 Formation of Agricluster 291

protection from the weather and have little or no access to dependable infra-
structure (Kaplinsky & Morris, 2019).
Since they lack the resources to compete on an equal footing with larger
companies, SMEs face several difficulties. Indirect and direct production costs, as
well as their influence over input and output markets, are affected by these fac-
tors. It is possible to lower the cost of inputs, give incentives for market share, and
benefit from low-cost and long-term financing because of the financial muscle of
huge companies. Small- and medium-sized businesses, on the other hand, have a
variety of competitive advantages. They can adapt quickly to market changes
because they are not constrained by massive corporate bureaucracies. For
instance, small producers in East Africa’s agricultural mechanization industry
have swiftly converted from large-scale Northern countries’ capital goods imports
to smaller-scale and cheaper Chinese and Indian equipment (Agyei-Holmes, 2014;
Atta-Ankomah, 2014; Botchie, 2015; Hanlin & Kaplinsky, 2016).
Recent advances in mobile telephony have made it easier for African manu-
facturers to find new suppliers and customers by connecting them to global and
regional information resources. This has made it possible for small producers to
shop around for these new sources and markets (Aker & Mbiti, 2010). Aside from
that, indirect expenses may be shared with other businesses, for example, by
SMEs efficiently marketing their products under a common brand name. As for
market power, SMEs may pool their purchasing power and reduce input prices.
Research shows that clusters may attain collective efficiency by leveraging these
external economies and taking purposeful cooperative action to improve their
performance. Cluster dynamism was more likely to be seen when clusters
collaborated on a variety of activities (skills development, logistics, and market-
ing, in that order). SME exports have a great deal of potential in low-income
countries. In addition, existing relationships between customers and suppliers in
the area may frequently be exploited via the use of these linkages. Family and
ethnic relationships typically cross national boundaries, which helps to promote
commerce within the area (Kaplinsky & Morris, 2019).

MSMEs in Egypt: Driver for Expected Growth

Tourism, agriculture, manufacturing, and service industries all contribute almost
equally to Egypt’s GDP, making it one of the most well-rounded economies in the
region. Increased economic growth and a more favorable investment environment
have been achieved in Egypt because of recent structural reforms, and this is due
in part to progress made in the country’s transportation and communication
networks as well as the country’s energy and skilled labor markets. There is no
economy without its MSMEs. According to the World Bank, MSMEs are
responsible for creating four out of every five new employment opportunities in
the developing countries. Approximately 75% of the workforce in Egypt is
employed by SMEs. In the Arab world’s greatest economy, these occupations
constitute a major contributor to growth. Table 10.2 demonstrates the vital sta-
tistics about MSMEs in Egypt.
292 Dina El Kayaly

Table 10.2. Vital Statistics About MSMEs in Egypt.

MSMEs Micro-Sized Small-Sized Medium-Sized

Enterprises Enterprises Enterprises
Number 3.653 3.4 million (94% 216.9 (5.6% of 2,181 (0.1% of the
of million of the total the total total MSMEs in
registered MSMEs in MSMEs in Egypt)
enterprises Egypt) Egypt)
Number 9.7 7.7 million (79%
of million of total workers
employees in field)
Salaries of LE
employees 119.2
billion
The LE LE 534.9 billion EGP 527.5 EGP 175.1 billion
output 1.237 (43.2% of the billion (42.6% of (14.1% of the total
trilliontotal output of the total output output of MSMEs
MSMEs in of MSMEs in in Egypt)
Egypt) Egypt)
Values LE 804 LE 411.5 billion EGP 296.3 EGP 96.3 billion
added billion (51.2% of the billion, (36.8% (12% of the total
total value of the total value value added by
added by added by MSMEs in Egypt)
MSMEs in MSMEs in
Egypt) Egypt)
Source: Central Agency for Public Mobilization and Statistics – April 2020 (Egypt Today, 2020).

Egypt’s MSME sector development is hampered by several challenges related

to the regulatory environment, financial infrastructure, lending capacity of
financial institutions, enterprise management skills, enterprise creditworthiness,
liquidity of financial intermediaries, and the availability of risk-sharing
instruments.

Agribusiness in Egypt: Opportunities and Challenges

Agriculture has always been the backbone of the Egyptian economy. Egypt’s
agricultural sector contributes by more than 15% to the GDP, representing 28%
of job opportunities and 55% of rural employment and 23% of the exports (CBE,
2022). Egypt’s agrifood system, considering both agriculture and food processing
as well as related input and trade systems, contributes by 24.5% to the country’s
GDP and by 23.2% to Egypt’s labor value added. The large majority of the food
processing activity is in Lower Egypt (78.3% of food processing gross output),
 Formation of Agricluster 293

while Upper Egypt plays an important role in primary agriculture, contributing

30.2% to agricultural gross output (UNIDO, 2020).
Agriculture and food production is one of Egypt’s most attractive yet under-
serviced investment opportunity. The sector is facing several challenges including
climate change, urbanization, a fast-growing population, limited water resources,
fragmented and lack of modern logistics, limited utilization of technology, and
increasing demand for exports. It is a fact that Egypt processes less than 10% of its
fresh crops (UNIDO, 2020). The sector is dominated by small-scale traditional
farmers, accordingly, the government decided to encourage adoption of innova-
tive technologies, and has partnered with international organizations to achieve
such an aim (Oxford Business Group, 2020).
The study aimed to answer the following research questions:

(1) What are the barriers facing SMEs in agribusiness in Egypt?

• To what extend economic environment and governmental support can
hinder the success of SMEs in agribusiness in Egypt?
• To what extent access to finance can hinder the success of SMEs in
agribusiness in Egypt?
• To what extend lake of needed skills can hinder the success of SMEs in
agribusiness in Egypt?
• To what extend market conditions can hinder the success of SMEs in
agribusiness in Egypt?
(2) Evaluate and rank of the barriers facing SMEs in agribusiness in Egypt.
(3) Provide guidelines for a business model integrating small farmers and pro-
ducers into an integrated agribusiness cluster (AbdelAziz & Abdel Azim el
Hammady, 2017).

Study Methodology
To acquire information on the issues confronting agribusiness-related MSMEs,
secondary and primary sources were consulted. The purpose of this study is to
listen to agribusiness-related MSMEs in Egypt, to discuss the issues confronting
them, and to describe the details of the business model that will integrate small
farmers and producers into an integrated agribusiness cluster. The study used
questionnaires, open-ended interviews, and industry secondary reports, as data
collection techniques. The study population comprises all registered MSMEs
engaged in agriculture in Egypt. According to the Ministry of Trade and Industry
Strategy (2016–2020), the total number of MSMEs is 2.5 million enterprises, 20%
of them are not registered. Agriculture MSMEs account for over 1.1% of all
MSMEs in Egypt, while agribusiness MSMEs account for 1.7% of all MSMEs in
Egypt, besides the fact that around 30% of MSMEs in trading and manufacturing
are agribusiness-related entities and expanding, as reported by the Egyptian
platform of MSME (Egyptian Platform for MSMEs, 2021).
Due to their advantageous urban layout and adequate infrastructure, this
study will concentrate on agribusiness MSMEs situated in Cairo, Sharqia, and
294 Dina El Kayaly

Table 10.3. Definition of Micro, Small, and Medium Enterprises.

Annual Turnover Paid up or Invested Capital

Micro Less than EGP 1 million Less than EGP 50000
enterprise
Small Between EGP 1 million and Industrial: Between EGP 50000
enterprise EGP 50 million and EGP 5 million
Nonindustrial: Between EGP
50000 and EGP 3 million
Medium Between EGP 50 million Industrial: Between EGP 5000
enterprise and EGP 200 million and EGP 15 million
Nonindustrial: Between EGP
3000 and EGP 5 million
Source: Shalakany (2020). j The New Law on the Development of Micro, Small and Medium
Enterprises is Out.

Gharbia governorates accounting for around 25% of all agribusiness MSMEs in

Egypt. The sample frame was obtained from “Medium, Small, and Micro
Enterprise Agency – MSMEDA.” Table 10.3 documents the definition of micro,
small, and medium enterprises issued in 2020.
Purposive sampling procedures with nonprobability selection were used to pick
a sample of 120 MSME owners. The questionnaires were completed via personal
interviews in November 2021, with the results published in December 2021. A
total of 100 completed surveys were deemed useable out of the total of 120
received, giving an 83% response rate.
To correctly design the questionnaire, we researched secondary sources and
compiled a lengthy list of potential difficulties facing MSMEs, as well as sought
expert input to confirm the construct’s content. The instrument included two
sections. The first section is demographic section of SMEs, while the second
section is related to the obstacles faced by SME sector. The scale for measuring
obstacles was adopted from previous studies done during 2022–2015 (Bilal & Al
Mqbali, 2015; Nawaser, Khaksar, Shaksian, & Jahanshahi, 2011; Sherazi, Iqbal,
Asif, Kashif-ur-Rehman, & Shah, 2013). Some modifications were to make it
more understandable for respondents. A questionnaire was created in which
respondents were asked to score different difficulties using five-point Likert scales
(with labels ranging from High impact to Little impact). See the appendix for the
designed questionnaire. It was validated through experts’ interviews followed by
pilot of 30 respondents. The scale was discovered to be very reliable, with a
Cronbach’s alpha value greater than 0.7.
 Formation of Agricluster 295

Research Insights
According to a literature analysis and expert opinion, these hurdles were classified
into four categories: finance, skills required, economic environment, and market
norms. Then the Importance Index per factor was calculated based on the
following equation:
¼ ðð5n5 1 4n4 1 3n3 1 2n2 1 n1 Þ=5ðn1 1 n2 1 n3 1 n4 1 n5 ÞÞ 3 100

where n1 is the number of subjects picked “Negligible impact,” n2 is the number of

subjects picked “Limited impact,” n3 is the number of subjects picked “Average
impact,” n4 is the number of subjects picked “High impact,” and n5 is the number
of subjects picked “Very high impact.” Then, the Importance Index of the groups
of factors was calculated.

Challenges Facing the Agribusiness MSMEs

The interviews started with open-ended question in which the respondents were
asked to outline the difficulties they encountered while starting and managing
their projects. The respondents agreed that the most significant problems were the
economic conditions and finance methods, for example, financial struggles. They
were then provided with a battery of Likert scale questions in which they were
asked to assess in a rating-like format the importance of different obstacles. After
collecting the 100 surveys, an Importance Index for each task was produced based
on the responses. The most significant group of elements was determined to be
“economic environment and government assistance,” followed by “access to
financing,” and then the other two categories of factors were placed in a distant
second and third place, respectively in Table 10.4. The findings of the open-ended
question were verified by the findings of the closed-ended question.
Taking a closer look to the details of the indexed challenges, we noticed that
changing legal framework, insufficient working capital, insufficient working to
start a business, price volatility, and limited control are the utmost crucial
challenges.

Impact of Market-Related Issues on the Agribusiness MSME Success

The questionnaire assessed the effect of market-related concerns on small com-
pany owners. Five market-related difficulties were found via secondary research; a
question was developed to determine whether any of the five market-related issues
are seen as concerns that might result in the collapse of MSMEs in Egypt.
All respondents pointed out fierce competition as the primary impediment to
their business’s growth (see Fig. 10.1). They agreed that marketing activities and
the availability of consistent market information had a significant influence on
business success, and then came the poor location of the project as a factor that
might have a significant impact, and lastly, they cited product quality. According
to respondents, the criteria listed above do have an effect on their business’s
performance and success.
296 Dina El Kayaly

Table 10.4. Importance Index by Key Groups.

Key Groups of Factors Importance Rank

Index
Economic Environment Changing legal 92.9 1 (Average
and governmental framework total score of
support Weak insurance 78.8 75.3)
system
Price volatility and 82.1
limited control
Limited access to 47.4
information
Access to Finance Insufficient capital to 86.4 2 (Average
start the business total score of
Insufficient working 89.2 73.72)
capital
Access to land and 50.2
high land reclamation
costs
Raising operating 74.6
costs
Banking processes 68.2
and risk calculation
Lack of needed skills Lack of marketing 69.8 3 (Average
skills total score of
Lack of R&D 33.2 60.34)
Lack of ability to 62.1
manage the project
Lack of knowledge 63.2
about export
Limited of trained 73.4
productive staff
Market norms Role of brokers 69.5 4 (Average
Attitude toward 62.2 total score of
women contribution 54.3)
Consumer changing 33.2
taste
Losses in the value 52.4
chain
Source: Analysis done by the researcher using primary data – December 2021.
 Formation of Agricluster 297

Low product quality 75%

Poor location of the project 79%

Ineffective marketing activities 84%

Lack of consistent market knowledge 85%

Sever Competition 98%

0% 20% 40% 60% 80% 100%

Fig. 10.1. Market-Related Difficulties. Source: Analysis done by the

researcher using primary data – December 2021.

Impact of Internal Issues on the Agribusiness MSME Success

When asked about specific skills that they lack and needed to better run their
businesses, the respondents mentioned the following skills. Clearly, sales and
marketing abilities are the most in demand among all responders as demonstrated
in the Table 10.5.
A further analysis was conducted linking market challenges with needed skills.
According, to the research sample, 70% of respondents said that lack of mar-
keting abilities was their worst issue, while almost 90% of respondents said that
lack of money was their biggest obstacle. The result of conducting statistical
correlation revealed that there is a moderate, to substantial, positive correlation

Table 10.5. Lacked Skills.

Internal Issue Specific Task Needed %

Sales and Marketing Pricing 32%
Marketing 26%
Writing a business plan 6%
Forecasting sales 36%
Accounting Bookkeeping 23%
Managing cash 18%
Leadership Managing conflicts 28%
Managing stress 19%
Motivating people 12%
Source: Analysis done by the researcher using primary data – December 2021.
298 Dina El Kayaly

between the abovementioned answers, leading us to believe that Egypt’s MSMEs

had a pervasive difficulty with cash flow, and as a result, lacked the resources to
effectively market their businesses. It is a vicious loop that requires immediate
solution. The solution is to draft a different business model, AIP.

AIP: Business Models and Inclusive Market Development

In order to survive, it is imperative that MSME owners and managers develop
business models, which will lead to the business growth and prosperity. A business
model is all about “what a company does and how it makes money out of it.” AIP
is considered a vehicle for the structural transformation of the economy aiming to
support and commercialization of the agricultural sector. But how can we do it?
Does grouping SMEs in a cluster give them more power? What could be the
mechanism to accelerate the development of the agribusiness sector in Egypt?
It is a fact that the cheap cost per unit of goods is made possible by huge
volume. However, for many smallholders, volumes are modest, and standards are
expensive per unit. This combination might lead to circumstances where small-
holders are unable to bear the costs of establishing and maintaining such stan-
dards because of financial constraints. Small farmer inclusion and equality, as
well as business efficiency, must be included into new business models that do not
exclude the most efficient farmers. Smallholders have a competitive advantage in
terms of land, pricing, farm management, quality, and innovation, which may be
used in the development of locally tailored business models. The most sensitive
parts of a business model, such as the pricing structure, the value proposition, and
the integrity and safety of the product, must not be compromised in the quest of
greater inclusivity, particularly when managing supply from a large number of
small producers (United Nations Industrial Development Organization, 2018).
An increasing number of economists see AIPs, which are defined here as
industrial parks primarily or exclusively dedicated to agroprocessing and
agro-inputs activities, as a potentially powerful tool for creating both direct and
indirect jobs, generating income for smallholder farmers, ensuring food security,
generating export revenues, substituting for imports, increasing tax revenues, and
moving up the value chain. (UNIDO, Integrated Agro-industrial parks in Egypt,
2017). As economies of scale are achieved, lower production costs, greater reve-
nue generating activities, and new employment possibilities are created. There-
fore, connecting smallholder farmers to formal value chains is so important:
Focusing on agro-industry development by tackling value chain obstacles
(ranging from restricted access to information, funding, and technology) will help
Egypt accomplish its industrial development objectives and expedite economic
growth (UNIDO, Integrated Agro-industrial parks in Egypt, 2017; Kaplinsky &
Morris, 2018).
In Africa, AIPs are a relatively new occurrence. According to a recent study by
Commercial Agriculture for Smallholders and Agribusiness released in October
2021, the following are the most critical AIP success factors as demonstrated in
Table 10.6.

Table 10.6. Most Critical AIP Success Factors.
Success Factors
Cross-cutting factors: leadership,
institutions, and management
Attracting firms and achieving
development
Formation of Agricluster 299
In More Details. . .
• Prominent and sustainable political
leadership as well as proficient coor-
dination and delivery methods.
• The continuation, transparency,
consistency, and predictability of
policy.
• Integrating AIPs into overarching
development plans.
• The implementation and administra-
tion of AIP are guided by top-notch
research.
• Encourage public–private collabora-
tion through mobilizing long-term
funding.
• A private sector approach should be
applied to AIP’s management.
• Get the park’s dimensions right. By
adapting and responding to changing
market circumstances, you can
effectively manage it.
• Keeping the AIP and the outer
worlds of business in harmony.
• Choosing the best tenants to com-
plement one another.
• Nonfiscal incentives should take
precedence over fiscal ones.
• Efficient platform for private sector
engagement that makes sure the park
operator is aware of the altering
requirements and capabilities of ten-
ant companies.
• Achieving correct balance between
the regulations and incentives.
• Getting the right location for the
park.
• Ensuring that the park and the sur-
rounding area have high-quality
infrastructure.
• Making sure commerce and other
governmental activities run
smoothly.
300 Dina El Kayaly

Table 10.6. (Continued)

Success Factors In More Details. . .
• The creation of strong links between
agroprocessing enterprises in AIPs
and farmers in neighboring regions is
crucial to the success of AIPs opera-
tion and development.
• Making the SMEs take part in the
ecosystem of AIP.
• Increasing the number and quality of
jobs created by AIPs by attracting
and training a highly qualified
workforce.
Source: Commercial Agriculture for Smallholders and Agribusiness, released October 2021.

To promote the agro-industrial sector, an AIP must be a multispecialty center

with the appropriate material and technological foundation as well as the
requisite infrastructure as well as specialized equipment, facilities, and legal
framework. To foster the growth of small- and medium-sized agricultural busi-
nesses across the area, the park’s mission is to provide the activities mentioned in
Table 10.7.
As per the research study conducted by the African Development Bank Group
and published in June 2021, the following considerations should be made in order
to successfully implement an AIP:

(1) The government’s ability to design and implement AIP effectively, particu-
larly in collaboration with the private sector (including foreign investors),
will be critically dependent on the presence and suitability of current legis-
lative tools and institutional frameworks.
(2) There must be a long-term and strong commitment from political elites at the
highest levels to engage in beneficial terms with private investors and to
ensure policy coherence in the provision of incentives, including ease of doing
business, the delivery of various public goods, and the monitoring of outputs
from investments made under these enabling incentives.
(3) The “whole picture” of population growth and demographic transition, fast
urbanization, digitalization, the post–COVID-19 economic recovery, and
probable global supply chain reconfiguration must be taken into account
when developing macroeconomic policy to assist agricultural
transformation.
(4) In order to engage the private sector, the government and its agencies must
have sufficient knowledge and understanding of negotiation strategies, global
markets, supply and value chains, and related financing and marketing
 Formation of Agricluster 301

Table 10.7. Activities to be Offered by the AIP.

Activities
Production Farms
Greenhouses
Agriculture complex
Processing (interrelated Preparation, freezing
products, e.g., diary, Juice extraction
poultry, vegetables Sauce and dressing production lines
processing)
Other production lines
R&D Incubators
Labs
Quality and calibration labs
Training center
Innovation center
Services Utilities
Legal forms and registrations
Logistics (storage, shipping, customs clearance)
Waste recycling
Outsourcing activities
Trading B2B networking
Trading (local and international markets)
Packaging
Marketing activities
Retail outlet
Source: Integrated Agro-industrial parks in Egypt - Integrated Agro-industrial parks in - UNIDO
(2017).

provisions, as well as international standards and requirements for export

markets.
(5) Develop foreign development partners that believe in making agricultural
transformation and value-added agro-industrialization, but the government
must set its own development agenda for structural change and create limits
within which external partners may assist.
(6) To reap the benefits of digitalization in the global economy, all sectors of the
economy must be connected to the internet and information and commu-
nication technologies (ICT). Overall, it will have a significant influence on
modernizing agriculture.
(7) Value-adding strategies and policies must be entrenched in the home econ-
omy via input supplies such as labor and industrial inputs from the local
302 Dina El Kayaly

manufacturing sector, with emphasis on building and reinforcing links across

different sectors of the economy.
(8) Structural reform in agricultural and rural regions is essential to generate
employment and welfare advantages. This transformation must present itself
not only in input and product markets but also in the labor market. Egypt’s
Minister of Planning mentioned in May 2021 that main goals of the agri-
cultural sector include food and water security achieved through increasing
the productivity of the agricultural sector and its share of the GDP, while
creating new job opportunities and increasing the income of small farmers,
not to forget supporting agricultural exports and improving the sector’s
competitiveness (Daily New Egypt, 2021).
(9) If implemented correctly, this technique may provide a slew of advantages to
rural communities and economies, including labor-intensive job possibilities,
agro-industrial value addition production, and economies of scale for export
diversification. (African Development Bank Group, 2021).

Based on the previous gathered data, the suggested business units in the AIP
represent business opportunities along the value chain. Table 10.8 documents
these opportunities.
AIPs have a unique advantage in being able to bring together various com-
ponents of the value chain in a single location, synchronizing their activities and
enabling the delivery of a wider range of both manufacturing and services
considering that it is a capital-intensive project. Such an approach ensures the
sustainability of the project and its continuation.

Limitation and Future Research

Given that this is a novel idea, more study is needed, especially on the imple-
mentation and implications of a variety of policies (e.g., industrial, trade, edu-
cation and skills training, digitization, etc.) and how policies may develop as a
cohesive area of intervention in the future. Study sample is not representing the
whole MSMEs sector of Egypt. Future research can be conducted for more depth
understanding of obstacle facing MSMEs in Egypt focusing on different sectors
beside the agribusiness. Further limitation, study is not considered to be a causal
or a correlation study to assess the impact of these obstacles.
Another possible area of future research is related to the expected reorgani-
zation of regional and global supply, and value networks in a post–COVID-19
economic recovery setting should assist the growth and expansion of African
agriculture. Africa’s potential in this field has already attracted significant
land-based foreign investments from European, Chinese, Saudi Arabian, South
Korean, and Indian companies, which have invested hundreds of millions of
dollars to lease large tracts of arable land for export-oriented commercial farming
and agroprocessing in countries such as Cameroon, Ethiopia, Kenya, the Dem-
ocratic Republic of the Congo, Madagascar, Mozambique, and Senegal.
 Formation of Agricluster 303

Table 10.8. Opportunities Along the Value Chain.

Step on the Value Chain Units in AIP

Inputs • Contracted farmers (well-selected vegetables and
fruits)
• Poultry broiler farms
• Dairy farms
• Meat farms
• Slaughterhouse
• Feed mill
Process • Product processing (preparing, freezing,
extracting, etc.) for all inputs
• Product and wrapping
• Product storage/warehouses
• Export station
• Waste recycling plants (producing fertilizers,
plastic recycling, biogas, etc.)
Logistics Inbound/outbound logistics (trucks/refrigerated
cars and cold chain)
Marketing • Outlets targeting wholesalers
• Outlets targeting consumers
• Sales team promoting the products locally and
through exports
• Market maker/business developer
Support functions • Market intelligence
(Infrastructure) • Marketing agency
• HR agency
• Quality labs and agroadvisor
• Custom clearance
• Waste processing
• Energy production and optimization/solar units
• Design shop
• Shared technology especially focusing on
sustainability
• Shared meeting rooms and training center
• Shared business services (receptionist, printing,
etc.)
• Changing rooms and toilets for personnel
• Shared transportation for personnel
• Utility maintenance services
• Office building offering shared spaces
Source: Analysis done by the researcher using primary data – December 2021.
304 Dina El Kayaly

This trend, along with favorable legislative and institutional frameworks, has
the potential to boost and expand the continent’s value addition agro-industri-
alization agenda (African Development Bank Group, 2019).

References
AbdelAziz, M. Y., & Abdel Azim el Hammady, H. A. (2017). Integrated Agro-
Industrial Parks in Egypt Piloting the concept in Qalyoubia Governorate (pp. 1–23).
Cairo: Green Trade Initiative. Retrieved from https://open.unido.org/api/
documents/5205257/download/Agro-Industrial%20Parks%20-%20Qalyoubia%
20case%202017.pdf
Abdiev, M. Zh, & Toktorov, K. K. (2017). Rol i znachenie aropromyshlennogo
klastera v jekonomike strany [Role and importance of agricultural cluster in the
economy of the country]. Ekonomika i biznes: teorija i praktika, 1(4), 5–8. (in
Russian). Retrieved from http://economyandbusiness.ru/rol-i-znachenie-
agropromyshlennogo-klastera-vekonomike-strany
African Development Bank Group. (2019). Retrieved from https://www.afdb.org/sites/
default/files/documents/publications/development_perspectives_on_sapzs_in_
africa_lessons_from_experiences_-_260520219.pdf. Accessed on December 2021.
African Development Bank Group. (2021). Development perspectives on Special
Agro- Industrial Processing Zones (SAPZ) in Africa: Lessons from experiences.
Retrieved from https://www.afdb.org/sites/default/files/2021/12/13/sapz_va-
brochure.pdf
Agyei-Holmes, A. (2014). Tilling the soil in Tanzania: What do emerging economies
have to offer? PhD Dissertation, The Open University, Milton Keynes.
Aker, J. C., & Mbiti, I. M. (2010). Mobile phones and economic development in Africa.
Center for Global Development Working Paper No. 211. SSRN. Retrieved from
https://ssrn.com/abstract51693963 or http://dx.doi.org/10.2139/ssrn.1693963
Akopyan, A. R. (2016). Osobennosti realizacii podhodov k klasterizacii v ekonomike
stran evropeyskogo soyuza [Features of realization of approaches to the clustering
in economy of the countries of the European Union]. Vestnik Universiteta, 9,
153–160. In Russian. Retrieved from https://vestnik.guu.ru/jour/article/view/378
Atta-Ankomah, R. (2014). China’s presence in developing countries’ technology basket:
The case of furniture manufacturing in Kenya. Doctoral dissertation, Thesis (PhD),
Open University.
Bilal, Z. O., & Al Mqbali, N. S. (2015). Challenges and constrains faced by small and
medium enterprises (SMEs) in Al Batinah governorate of Oman. World Journal of
Entrepreneurship, Management and Sustainable Development, 11(2), 120–130. doi:
10.1108/WJEMSD-05-2014-0012
Board of Agricultural Extension of West Java. (2015). Information system on agri-
cultural extension [Indonesian version]. Bandung, Indonesia.
Boronenko, V., & Zeibote, Z. (2011). The potential of cluster development and the
role of cluster support policies in Latvia. Economic Annals, 56(191), 35–67.
Botchie, B. (2015). Comparative analysis of Asian drivers and Western capital goods: A
case of the cotton-garments and textiles value Chain in Uganda. Doctoral disser-
tation, PhD Dissertation, The Open University, Milton Keynes.
 Formation of Agricluster 305

Bylok, F., Pabian, A., & Kuceba, R. (2016). Management of a cluster as a network for
cooperation between SMEs in Poland. Small Enterprise Research, 23(2), 172–181.
CASA. (2021). Agro-industrial parks: Success factors, incentive mechanisms and
donor roles Tandem and Centre for Development Alternatives. Retrieved from
https://www.casaprogramme.com/wp-content/uploads/2021/10/Agro-industrial-
parks-success-factors-incentive-mechanisms-and-donor-roles.pdf
Central Bank of Egypt, Statistical bulletin. (2022, March).
Daily New Egypt. (2021). Planning Minister, IMF discuss Egypt’s National Structural
Reform agenda. Daily News Egypt.
Delgado, M., Porter, M. E., & Stern, S. (2014). Clusters, convergence, and economic
performance. Research Policy, 43(10), 1785–1799.
EDB Centre for Integration Studies. Status of Cluster Development in EDB Member
States. (2019, August). Retrieved from https://eabr.org/upload/iblock/47e/EABR_
Clusters_EN_09_2019-dlya-publikatsii.pdf
Edwards, L., & Jenkins, R. (2015). The impact of Chinese import penetration on the
South African manufacturing sector. Journal of Development Studies, 51(4),
447–463. doi:10.1080/00220388.2014.983912
Egypt Today. Total Output of Egypt’s MSMES Hits Le 1.2t: CAPMAS. (2020, April
23). Retrieved from https://www.egypttoday.com/Article/3/85024/Total-output-of-
Egypt-s-MSMEs-hits-LE-1-2T
Egyptian Platform for MSMEs. (2021, December). Retrieved from www.msme.eg
European Observatory for Clusters and Industrial Change. (2019). Cluster pro-
grammes in Europe and beyond. Retrieved from https://www.eucluster2019.eu/files/
events/4538/files/eocic-cluster-programme-report-2905.pdf
Falkovich, E. B. (2014). Teoreticheskie aspekty klasterizacii agrarnoj sfery [Theoret-
ical aspects of agrarian sector clustering]. Vestnik Tambovskogo universiteta. Seriya
Gumanitarnye nauki, 5(133), 73–79. (in Russian).
Foghani, S., Mahadi, B., & Omar, R. (2017). Promoting clusters and networks for
small and medium enterprises to economic development in the globalization era.
Sage Open, 7(1). doi:10.1177/2158244017697152
Gunawan, M. V., Asyahira, R., & Sidjabat, F. M. (2020). Environmental manage-
ment system implementation in MSMEs: A literature review. Jurnal Serambi
Engineering, 5(2).
Gunawan, T., Jacob, J., & Duysters, G. (2016). Network ties and entrepreneurial
orientation: Innovative performance of SMEs in a developing country. The
International Entrepreneurship and Management Journal, 12(2), 575–599.
Hanlin, R., & Kaplinsky, R. (2016). South–south trade in capital goods – the
market-driven diffusion of appropriate technology. European Journal of Develop-
ment Research, 28(3), 361–378. doi:10.1057/ejdr.2016.18
Janasová, D., Bobáňová, V., & Strelcová, S. (2017). Networking of small and medium
enterprises into clusters in the slovak republic. Procedia Engineering, 192, 370–375.
Jankowiak, A. H. (2013). Micro, small and medium enterprises clusters and the
regional development – Case of India, Clusters, Networks and Markets in the
Asia-Pacific Region. Publishing House of Wroclaw University of Economics, 295,
41–49.
Jednak, S., Kraguli, D., & Parežanin, M. (2018). Knowledge and industry clusters as
drivers of economic development and competitiveness. Anali Ekonomskog Fakul-
teta u Subotici, 39, 3–17. doi:10.5937/aneksub1839003j
306 Dina El Kayaly

Jeraj, M., Marič, M., Todorović, I., Čudanov, M., & Komazec, S. (2015). The role of
openness and entrepreneurial curiosity in Company’s growth. Amfiteatru Economic
Journal, 17(38), 371–389.
Kaplinsky, R. (2008). What does the rise of China do for industrialisation in
Sub-Saharan Africa? Review of African Political Economy, 35(115), 7–22. doi:10.
1080/03056240802011360
Kaplinsky, R., & Morris, M. (2018). Standards, regulation and sustainable develop-
ment in a global value chain driven world. International Journal of Technological
Learning, Innovation and Development, 10(3/4), 322. doi:10.1504/ijtlid.2018.093718
Kaplinsky, R., & Morris, M. (2019). Trade and industrialisation in Africa: SMEs,
manufacturing and cluster dynamics. Journal of African Trade, 6(1/2), 47–59. doi:
10.2991/jat.k.190812.001
Khukhrin, A. S., & Bundina, O. I. (2010). Razvitiye agrarnykh klasterov v Rossiyskoy
Federatsii: problemy i resheniya. Development of agro-clusters in the Russian
Federation: problems and solutions. Ekonomika, trud, upravleniye v selskom kho-
zyaystve, 3(4), 10–13. (in Russian).
Kostenko, O. V. (2016). Agropromyshlennye klastery v ekonomicheskoi polotike
regionov Rossii [Agroindustrial clusters in the economic policy of Russian regions].
Ekonomika: vchera, segodnya, zavtra, 5, 55–68. (in Russian). Retrieved from http://
publishing-vak.ru/file/archive-economy-2016-5/5-kostenko.pdf
Lozonogova, E. V. (2019). Regulirovanie vzaimodejstviya hozjajstvujushhih subyektov
RF na osnove ekonomikomatematicheskoi identifikacii mezhregionalnyh klasterov
[Regulation of interaction of economic units in the RF on the basis of
economic-mathematical identification of trans-regional clusters]. Ph.D. Dissertation,
Perm National Research Polytechnic University, Perm. (in Russian). Retrieved
from http://www.psu.ru/files/docs/science/dissertatsionnye-sovety/kozonogova/
Kozonogova-disser.pdf
Leiva, M. (2021, October 27). Agribusiness trends to look out for in 2021. Investment
Monitor. Retrieved from https://www.investmentmonitor.ai/sectors/agribusiness/
agribusiness-trends-to-look-out-for-in-2021
Ministry of Economic Development of the Russian Federation. (2008). The. Meto-
dicheskie rekomendatsii porealizatsii klasternoi politiki v subyektah Rossiyskoi
Federatsii (podpisany zamestitelem Ministra ekonomicheskogo razvitiya Rossiy-
skoi Federatsii A.N. Klepachem ot 26.12.2008 g. N8 20636-AK/D19) [Methodo-
logical recommendations for the implementation of cluster policy in the constituent
entities of the Russian Federation (signed by the Deputy Minister of Economic
Development of the Russian Federation A.N. Klepach dated 26 December 2008
No. 20636-AK/D19).]. (in Russian). Retrieved from http://old.economy.gov.ru/
minec/activity/sections/innovations/development/doc1248781537747
Morris, M., & Einhorn, G. (2008). Globalisation, welfare and competitiveness: The
impacts of Chinese imports on the South African clothing and textile industry.
Competition and Change, 12(4), 355–376. doi:10.1179/102452908X357301
Nadvi, K., Lund-Thomsen, P., Xue, H. O. N. G., & Khara, N. (2011). Playing against
China: Global value chains and labour standards in the international sports goods
industry. Global Networks, 1, 334–354. doi:10.1111/j.1471-0374.2011.00329.x
Nawaser, K., Khaksar, S. M. S., Shaksian, F., & Jahanshahi, A. A. (2011).
Motivational and legal barriers of entrepreneurship development. International
Journal of Business and Management, 6(11). doi:10.5539/IJBM.V6N11P112
 Formation of Agricluster 307

Novikova, Yu. O. (2019). Agropromyshlennye klastery kak forma innovacionnogo

razvitiya otrasli [Agro-industrial clusters as a form of innovative development of
the industry]. Voprosy upravlenija, 6(61), 137–146. (in Russian). Retrieved from
https://cyberleninka.ru/article/n/agropromyshlennye-klastery-kak-forma-
innovatsionnogo-razvitiyaotrasli/viewer
Oxford Business Group. (2020). How Egypt is boosting food production and exports.
Retrieved at: How Egypt is boosting food production and exports j Egypt 2020 j
Oxford Business Group
Podbiralina, G. V., Migaleva, T. E., Goncharenko, L. P., Razumnova, L. L.,
Sybachin, S. A., & Tyurina, O. A. (2020). Role of agro-industrial clusters in
competitive growth of domestic agribusiness in the global market. Journal of
Critical Reviews, 7(9), 1885–1895.
Porter, M. E. (1998). On competition. Boston, MA: Harvard Business School Press.
Rabellotti, R. (2006). Supporting enterprise upgrading in clusters and value chains in
Latin America. Upgrading to Compete.
Sherazi, S., Iqbal, M. Z., Asif, M., Kashif-ur-Rehman, & Shah, S. S. H. (2013).
Obstacles to small and medium enterprises in Pakistan. Principal component
analysis approach. Middle-East Journal of Scientific Research, 13, 1325–1334. doi:
10.5829/idosi.mejsr.2013.13.10.1186
Sizhazheva, S. S., Mirzoeva, G. M., Kumisheva, M. M., & Abanokova, E. B. (2018).
Agropromyshlennye klastery kak uslovie innovacionnogo razvitiya odnotipnyh
regionalnyh ekonomik [Agro-industrial clusters as a condition of innovative
development of similar regional economies]. Upravlenie ekonomicheskimi siste-
mami. Elektronnyi zhurnal, 11(117). (in Russian). Retrieved from http://uecs.ru/
uecs-117-112018/item/5186-2018-11-08-06- 43-13
Small and Medium Enterprise Administration, Ministry of Economic Affairs. (2008).
SME industry clusters-cluster innovation and strategic development. Retrieved
from http://www.moeasmea.gov.tw/ct.asp?xItem57461&;ctNode5307&mp52
Smyth, I. A. (1990). Collective efficiency and selective benefits: The growth of the rattan
industry of Tegalwangi. (Working Paper Series: B-1). AKATIGA, Bandung,
Indonesia.
Smyth, I. A. (1992). The effects of a development project on handicrafts production in
a Sundanese village. PRISMA, 52, 12–30.
Sosnovskikh, S. (2017). Industrial clusters in Russia: The development of special
economic zones and industrial parks. Russian Journal of Economics, 3(2), 174–199.
Sosnovskikh, S., & Cronin, B. (2020). The effects of culture, attitudes and perceptions
on industrial cluster policy: The case of Russia. Competition and Change, 25(3–4),
350–381. doi:10.1177/1024529420949491
Suhaili, M., & Sugiharsono, S. (2019). Role of MSME in absorbing labor and
contribution to GDP. Economics Development Analysis Journal, 8(3), 301–315.
Umezurike, S. A., Iwu, C. G., Obokoh, L. O., & Umezurike, C. A. (2017).
Neo-liberalization: The impact of Chinese exports on South Africa’s sociopolitical
economy. Problems and Perspectives in Management, 15(1), 124–131. doi:10.21511/
ppm.15(1).2017.13
UN Department of Economic and Social Affairs. (2019). World population prospects
2019: Highlights. New York, NY: United Nations. Retrieved from https://
population.un.org/wpp/Publications/Files/WPP2019_Highlights.pdf
308 Dina El Kayaly

United Nations Industrial Development Organization. (2003). Strategy document to

enhance the contribution of an efficient and competitive SME sector to industrial and
economic development in the Islamic republic of Iran. Retrieved from https://www.
unido.org/uploads/tx_templavoila/Strategy_document_to_enhance_contribution_
of_efficient_and_competitive_SME_sector__in_Iran.pdf
United Nations Industrial Development Organization. (2017). Integrated
Agro-industrial parks in Egypt - Integrated Agro-industrial parks in Egypt (unido.
org). 2017 – Retrieved December 2021.
United Nations Industrial Development Organization. (2018). Global value chains and
industrial development: Lessons from China, South-East and South Asia. UNIDO,
Vienna, Austria.
United Nations Industrial Development Organization. (2020). AGRI-FOOD AND
COVID-19 IN EGYPT: Adaptation, recovery and transformation.
United Nations Industrial Development Organization (UNIDO). (2007). Industrial
development report 2007. Sustaining employment growth: The role of manufacturing
and structural change overview, Vienna.
United Nations Industrial Development Organization (UNIDO). (2013). Industrial
development report 2013. Sustaining employment growth: The role of manufacturing
and structural change overview, Vienna.
Wardhana, D., Ihle, R., & Heijman, W. (2020). Farmer cooperation in agro-clusters:
Evidence from Indonesia. Agribusiness, 36(4), 725–750.