Technoparks, incubators and smart cities develop in Algeria's ICT sector

A major transformation of Algeria’s IT landscape has taken place following the arrival of 3G and 4G technologies, with the country’s internet penetration rate jumping rapidly from 25.6% in 2014 to 71.2% by the end of 2016. In contrast to cuts in budgetary spending, the increased prevalence of integrated digital operations has helped reduce operational costs and improve efficiency for many businesses. The government’s plan to reduce economic dependence on hydrocarbons, along with the application of newly implemented technologies, provides an opportunity for small and medium-sized enterprises (SMEs) in tech industries to capitalise on national diversification strategies. Pursuing such an approach may be key to IT ventures accessing public funds, with start-ups not identified as an area earmarked for strategic governmental investment.

Catalysts Of Innovation

Algeria’s roadmap for improving its IT landscape involves the establishment of a series of technoparks that are designed to act as interconnected IT clusters. One of these is the Sidi Abdellah Technopark, which was launched in 2004. Located just 30 km from Algiers, it provides an environment for innovative tech companies to develop and expand their businesses. With a heavy emphasis on the development and promotion of apps and hardware, the park has as a facility for entrepreneurs and a liaison centre to boost networking possibilities. Managed by the National Agency for the Promotion and Development of Technoparks (Agence Nationale de Promotion et de Développement des Parcs Technologiques, ANPT), the Sidi Abdellah project has helped foster digital development through strategies that provide start-ups with platforms, expertise and support to expand their product offerings.

The park offers newcomers with the opportunity to collaborate with a network of local and international companies, including Ericsson, Huawei and IBM, while the facility also boasts high-quality technological infrastructure such as 4G connections and a 9800-sq-metre incubation facility. While the park’s location has been a discouraging factor for some companies, the establishment of bus services connecting Sidi Abdellah to certain parts of Algiers has improved connectivity.

Strategic Association

Offering further assistance to the ICT sector is the P3A programme, a strategy aimed at strengthening ties between Algeria and the EU implemented under an EU Association Agreement. With the objective of helping diversify Algeria’s economy, the €40m programme, launched in 2009, allocates funding and support for ICT development and the reinforcement of telecoms infrastructure, further enhancing the competitiveness of SMEs in the sector. In addition, the Oran Technopark is expected be operational by 2021. Once completed, the site will have a start-up incubator, SME office space and a hotel to allow for the hosting of corporate events. The cities of Constantine, Sétif and Annaba are also being assessed as possible locations for similar projects in the future.

E-Commerce

The rapid expansion of 3G and 4G services in 2016 and 2017 has had a significant impact on electronic platforms. Following the launch of e-payment systems in October 2016, the rate of online activity has grown rapidly. Government officials said that 5000 e-payment transactions had been undertaken by December 2016, with the figure expected to surpass 10,000 by the end of 2017. The development has allowed bills for utilities, telecoms, insurance and other administrative issues to be paid electronically.

To ensure the transparency of online payments and the implementation of consumer protection measures, the government has been in the process of drafting a bill to regulate the e-payment sector. This is expected to be finalised and approved by the end of 2017. “The penetration of 3G has redesigned communications dynamics, resulting in a non-stop flow of data that needs to be democratised in order to protect the consumer, monetise services and regulate the market,” Salim Tamani, head of media and public relations at mobile operator Djezzy, told OBG. While e-payment services are growing in popularity, further development is needed to bridge the gap with world leaders in the segment. The expansion will be largely dependent on the structure of the developing regulatory framework. While 11 banks and nine other companies provided the initial offering of e-payment services in Algeria, the network is expected to grow in 2018 through the establishment of an interbank company responsible for expanding the e-payment network through the installation of electronic payment terminals. As part of a further service expansion, Mouatassem Boudiaf, the former deputy minister of digital economy and financial system modernisation, announced that e-payment via mobile phones would be available in 2018.

Start-Up Ecosystem

The recent burst in entrepreneurial initiative in the ICT sector comes amid government budget cuts and limited funding availability. High rents, a limited number of co-working spaces, investment risks and difficulties in monetising development represent some of the challenges facing entrepreneurs. Algeria’s delay in adopting online payment systems has also affected its start-ups, deterring potential partners and advertisers from investing. The wilaya (province) of Algiers has played a significant role in supporting start-ups, however, with the Sylabs agency – an accelerator for start-ups, developers and creative businesses – working to foster cooperation and collaboration between Algerian entrepreneurs.

SMART CITIES: The capital, Algiers, has been at the centre of efforts to design more modern, efficient and sustainable cities to adapt to future conditions, with the “Smart City Algiers” initiative looking to embrace the benefits of ICT to improve the quality of life of residents in the city. Planning for the project runs until the end of 2017, with implementation for the action plan to begin in early 2018. A call for tenders was placed in mid-2017, with start-ups, universities, consultants and other businesses encouraged to submit proposals that could contribute to the Smart City project.

The initiative has drawn the attention of US company Xerox, which is collaborating with two internet providers in two separate projects. The first consists of a plan to install cable television connections throughout the city, subsequently reducing the pollution associated with the production of satellite dish antennae. This would allow operators to use fibre-optic cables to provide cable television services through the installation of a single device for the whole building. However, the slowdown in the economy has halted the project.

The second project concerns the provision of an urban Wi-Fi connection throughout the city to improve data flow and connectivity in the capital. The plan has faced challenges, however, with budgetary contractions, bureaucratic licensing issues, and the vastness and complexity of Algiers’ urban landscape representing challenges for the project’s implementation.

Ict Solutions

Algiers has experienced major urban mobility improvements (see Transport chapter) and has upgraded its energy performance milestones in recent times. Although the country still has much more to do to reduce rates of pollution and meet sustainability targets, ICT developments have begun to offer solutions for issues such as waste management and resources optimisation. These include plans to establish a single-ticket system for the city’s transport system.

Efforts aimed at optimising the use of materials and space are also under way. In 2016 local urban furniture company AD Display began installing digital bus shelters in Algiers’ city centre, complete with LCD touch screens, Wi-Fi connections and USB ports to increase connectivity throughout the city. Along with plans to expand the installation of these smart designs to other cities, AD Display is working to integrate a GPS system into Algiers’ bus network, while other projects include the development of smart lighting initiatives in major cities.

Reaching Space

September 2016 marked a key expansion in Algeria’s National Space Programme following the launch of three new satellites. Alsat-1B, Alsat-2B and Alsat-1N were successfully deployed into space on September 26, 2016, providing Algeria with a boost in earth observation, meteorology and communications. Following the launch of Alsat-1 in 2002, Alsat-1B is the second medium-resolution observation satellite to be deployed by the country, with its multi-spectral camera and panchromatic plates providing images that help monitor territorial landscapes and natural disasters. The satellite operates as part of an international cooperation scheme with China, Nigeria, Turkey and the UK. Similar to Alsat-1B, Alsat-2B is an observation satellite capable of supplying high-resolution images, while Alsat-1N aims to develop greater information exchange between Algerian and UK space programmes. In a further development, the telecommunications satellite Alcomsat-1 is expected to be launched by 2018, according to the Algerian Space Agency.

Data Storage

Another area that has been identified as having significant growth potential is that of data storage, with efforts under way to establish third-party data centres across the country. “The ever-growing demand of data storage and the need for high-priced fibre-optic cables to support the systems is creating substantial difficulties for foreign companies,” Abdelhakim Bensaoula, general manager of the ANPT, told OBG. “There is a major opportunity to outsource storage in Algeria given the country’s outreach capacity. The steady development of data-storage accommodation represents a priority in the country’s strategy towards boosting the digital economy,” he added.

However, the creation of these data centres is thought to be dependent on the upcoming telecoms sector law, implementation of which aims to reform the regulatory environment by allowing private companies into the nationalised communications market.

Cybersecurity

The growing volume of Algeria’s data traffic and the risk of possible cyberattacks have led the government to prioritise the development of cybersecurity protections, with efforts under way to implement a series of legal measures and ratify international conventions and protocols. In that regard, the People’s National Army organised its first seminar dedicated to cybersecurity in May 2017, where both military and civilian experts in the field debated the topic, and also provided lectures and practical workshops.

The Centre for the Prevention and Fight Against Computer Crime and Cybercrime, a division of the National Police Force, is the authority tasked with tackling cybercrime and illegal online activity. The centre places significant focus on actions such as illegal money laundering, human trafficking and online piracy. In addition, the government established an electronic communications taskforce in 2015 to monitor, track and register possible online offences. These efforts in fighting internet fraud and online crime were major factors behind Algeria rising 36 places in the International Telecommunications Union’s Global Security Index 2017, where it ranked 67th out of 164 countries.

It Skills

The digitalisation of the economy has led to a shift in skills training and education to suit the employment demands of the emerging high-tech market. In the past digital education has largely been provided to meet the needs of ICT companies in the sector; however, fresh efforts are aimed at further developing the IT skills of a wider proportion of Algerians. An example of this was the March 2017 launch of a digital economy master’s degree at, the Higher Institute of Management and Design, in collaboration with the Ministry of Finance. Meanwhile, in 2015 the Algerian Employers’ Association (Forum des Chefs d’Entreprises, FCE) launched the Jil’FCE programme, providing business leaders under the age of 40 with a range of training and networking opportunities. Further vocational training opportunities are set to be established in late 2017, offering courses designed to support development in the digital sector.

Forecast

The expansion of digital apps in Algeria comes amid efforts to diversify the country’s economy away from a reliance of hydrocarbons and is expected to enhance this objective. The digital empowerment of an app market focused on solutions for sectors such as agriculture, health and banking is among the tools Algeria can use to reduce costs and improve efficiency for various businesses and government departments.