This study investigates the impact of labor, education and innovation on Egypt’s competitiveness, and in turn, real economic growth. Using panel data regressions for twenty five countries, including Egypt, for the period 2005-2011, the study indicates that labor, education and innovation significantly affect competitiveness and real GDP growth.
Investing in these areas is, therefore, key to higher economic growth. Further, an analysis of Egypt’s specific time series for the period 1980-2009 indicates the importance of raising both the efficiency and level of expenditure on education, the need to enhance the country’s innovation capacity and the positive impact of youth employment on real GDP growth.
If Egypt manages to achieve a 5 percent improvement in its scores for education, innovation and labor that underlie the global competitiveness score, this will translate into greater real GDP growth estimated at 9.9 percent. The study emphasizes the need to:
improve the quality and efficiency of the educational system
invest heavily in job creation, especially for the youth
enhance innovation capacity towards higher output growth and welfare