Elmansy E028479c What Are The Barriers To Design and Innovation That Face SMEs Working in The Creative Sector in Egypt

FACULTY OF ARTS and CREATIVE TECHNOLOGIES
Masters Project in Design

Management
Dissertation
Module Code: COST70237 60 Credits
Project Title:
What are the Barriers to Design and Innovation that
Face SMEs Working in the Creative Sector in Egypt?
Student:
Rafiq Elmansy
E028479c
Module Tutor: Carol Meachem
Email Address: Carol.Meachem@staffs.ac.uk

Tel Number: +44 (0) 1782 294652
August 2016
Acknowledgements
This dissertation was written as part of my fulfillment of a masters degree in
Design Management. I would like to take the chance to warmly thank my
supervisor and award tutor, Professor Carol Meachem, for her continuous
support, help, and mentorship during this award. Also, I would like to thank Dr.
David Heap for his support during the research module of this project. Also, I
would like to take the chance to thank everyone who contributed to this research.
I am forever grateful to all those who participated, provided suggestions, and
invited participants to join this research with the aim of improving the design
industry in Egypt.
Finally, I would like to give a special thanks for my lovely wife, Radwa, for being a
source of inspiration and for her constant encouragement throughout my entire
life. I would like to thank my two beautiful daughters, Malak and Hala, for being
the joy and light of our lives. I would like to thank my entire extended family for
their support, especially during times of tight deadlines and high stress.
I dedicate this research to my small family and the souls of my father and mother,
who taught me how to acknowledge the blessings of learning and research
through every of my life.
Rafiq Elmansy (e028479c) - MA Design Management - 2016 2

Contents Page
1.0 Synopsis 9
2.0 Background 9
2.1 Aims and Objectives 11
2.3 Significance of the Research 12
2.4 Definition of Terms 12
2.4.1 Small and Medium Enterprises (SMEs) 13
2.4.2 Creative Sector 15
2.4.3 Creativity 16
2.4.4 Design 17
2.4.5 Innovation 17
3.0 Scope and Limitations 19
3.1 Creativity and Innovation 19
3.2 Creative Sector 20
3.3 Small and Medium Enterprises (SMEs) 20
4.0 Research Methodology 21
4.1 Literature Review
4.2 Quantitative Research 22
4.2.1 Questionnaire Design 23
4.2.2 Participants 23
4.3 Qualitative Research 25
4.3.1 The Interviewees 25
4.3.2 Interview Design 25
5.0 Literature Review 27
5.1 The Struggling Economy in Egypt 27
5.2 SMEs and the Economy 29
5.3 SMEs in Egypt 29
5.4 Barriers Faced by SMEs in Egypt 30
5.4.1 Financial Barriers 31
5.4.2 Non-Financial Barriers 31

5.5 Innovation 32
5.5.1 Benefits of Innovation Exploitation in SMEs 33
5.5.1.1 Innovation and Profitability 33
5.5.1.2 Innovation and Economic Growth 34
5.5.1.3 Innovation and Market 34
Competitiveness
5.5.2 Barriers to Innovation in Creative SMEs 35
5.5.2.1 Financial Barriers 36
5.5.2.2 Marketing Skill Barriers 37
5.5.2.3 Management Barriers 37
5.5.2.4 Human Resource Barriers 37
5.5.2.5 Other Barriers 38
5.6 Design Policies 39
6.0 Findings and Analysis 42
6.1 Background on Participant Companies 42
6.1.1 The firms age 42
6.1.2 The estimated firms capital 43
6.1.3 Number of employees 44
6.1.4 Firms locations and branches 45
6.1.5 Target business 46
6.1.6 Correlation between size and market reach 47
6.1.7 The firms business niche 48
6.1.8 Creativity and Innovation in the firms 49
6.1.9 Designers wages and titles 50
6.2 Creativity and Innovation in the Firms 52
6.2.1 Design role inside firms 52
6.2.2 Firms willingness to invest in innovation and 53
creativity
6.2.3 Clients acceptance of innovation and new 54
ideas

6.2.4 The importance of creativity and innovation 56
for creative SMEs
6.3 The internal barriers of design and innovation 57
6.3.1 Internal financial barrier to innovation and 57
creativity
6.3.2 Internal managerial barriers 58
6.3.3 Internal experience-related barriers 59
6.3.4 Internal marketing-related barriers 61
6.3.5 Technology and infrastructure-related 62
barriers
6.3.6 Internal Human Resources-related barriers 63
6.3.7 Internal Intellectual property-related barriers 64
6.3.8 Other internal barriers 65
6.4 External Barriers to Design and Innovation 66
6.4.1 External financial barriers 66
6.4.2 External marketing-related barriers 68
6.4.3 External cultural-related barriers 69
6.4.4 Other external barriers 70
6.5 Other Questions 71
6.5.1 Clients acceptance of new, innovative 71
products
6.5.2 Consumer collaboration in the creative 72
process
6.5.3 Collaboration with other firms 73
7.0 Conclusion and Recommendations 74
8.0 References 79
9.0 Appendices 88

List of Figures
Figure 1. The relation between internal and external barriers of creativity 36
and innovation.
Figure 2. The firms age 43
Figure 3. The estimated firms capital 44
Figure 4. Number of employees 45
Figure 5. Firms locations and branches 46
Figure 6. The target business 47
Figure 7. The firms business niche 49
Figure 8. Creativity and Innovation in the firms 50
Figure 9. Designers wages 51
Figure 10. Designers titles 52
Figure 11. Design role inside firms 53
Figure 12. Firms willingness to invest in innovation and creativity 54
Figure 13. Clients acceptance of innovation and new ideas 55
Figure 14. The importance of creativity and innovation for creative SMEs 56
Figure 15. Internal financial barrier to innovation and creativity 58
Figure 16. Internal managerial barriers 59
Figure 17. Internal experience-related barriers 60
Figure 18. Internal marketing-related barriers 61
Figure 19. Technology and infrastructure-related barriers 63
Figure 20. Internal Human Resources-related barriers 64
Figure 21. Internal Intellectual property-related barriers 65
Figure 22. Other internal barriers 66
Figure 23. External financial barriers 67
Figure 24. External marketing-related barriers 68
Figure 25. External cultural-related barriers 69
Figure 26. Other external barriers 71

Figure 27. Clients acceptance of new, innovative products 72
Figure 28. Consumer collaboration in the creative process 73
Figure 29. Collaboration with other firms 73

List of Tables
Table 1. Classification of Egyptian SMEs (FinBi-Finance and Banking 14
Consultants International and FinCorp, 2004)
Table 2. The number of SMEs and their workers (Hussein and Bremer, 30
2014)
Table 3. Areas of operation of a national design policy (Qian, 2010) 40

1.0 Synopsis
In Egypt, SMEs make up a significant percentage of the national economy in terms
of wealth and the rate of employment. However, a very low percentage of
contribution has been identified in terms of the manufacturings value-added
innovation. This research investigates the barriers to design and innovation faced
by the SMEs working in the creative sector in Egypt. It is based on three main
assumptions: 1) the creat vive SMEs are playing a role in the Egyptian economy;
2) these companies are adopting a design and innovation process in order to
achieve innovation; and 3) there are barriers that face these companies and stand
as obstacles to achieving innovation. These assumptions are based on the
hypothesis that improving the design and innovation processes inside SMEs can
have a positive impact on the firms performance in terms of profitability,
competitiveness, and market value.
The study posits that, while there is an understanding of the importance of design
and innovation in businesses within Egypt, firms still see it from the narrow
perspective of product development, rather than as a broader approach to their
business. While firms either adopt or welcome design and innovation processes
within the organization, they face internal and external barriers that prevent them
from achieving innovation and creativity. A primary research was conducted based
on a questionnaire. Interviews to investigate these barriers and provide
recommendations can be adopted in a form of an Egyptian Design Policy in order
to improve the creative SMEs business performance and contribution to the
national economy.
2.0 Background
Since the so-called Arab Spring erupted in January 2015 (Springborg, 2011),
Egypts struggling economy has been dramatically affected by the challenges that
disrupt not only the local economy, but also its neighbors. The GDP growth rate

which dropped from 7.3% in 2008 to around -4.0% in 2011 (Economics, 2016) is
still struggling to recover its losses five years after the revolution. Before the
revolution, the Egyptian economy achieved high growth rates even during the
global financial crisis that occurred between 2008 and 2009. However, the growth
rate has dramatically declined in the subsequent years.
Various studies have been conducted to investigate the role of small and medium-
sized enterprises (SMEs) in the Western economy. Scholars and practitioners
have highlighted SMEs as a key player in national economies and a contributor to
GDP growth with its different subdivisions: micro enterprises, small enterprises,
and medium enterprises (Savlovschi and Robu, 2011). According to the Edinburgh
Group (2016), SMEs contribute more than 60% of the GDP in low-income, middle-
income, and high-income countries. In Egypt, SMEs significantly contribute to the
national economy in terms of the wealth created and the rate of employment
(Zaied, 2012), as it represents 90% of the enterprises working in the private sector
(El Kabbani and Kalhoefer, 2011) and generates 26% of the employment (Tolba,
Seoudi and Fahmy, 2014).
Although this is a significant contribution to the Egyptian economy, manufacturing

SMEs value-added to the national economy represents only 7.5% (CAPMAS,
1996), indicating the presence of limiting variables that prevent these enterprises
from achieving full contribution to economic growth (El Kabbani and Kalhoefer,
2011). These limiting variables can include financial barriers (Beck and Demirguc-
Kunt, 2006), macroeconomic instability, unpredictable legal and regulatory
environments, and increasing transaction costs (Tolba, Seoudi and Fahmy, 2014).
In recent years, start-ups and entrepreneurship programs have been established

in the Egyptian market (Hassan, 2010) as a means of building opportunities for
small enterprises through innovative business models. However, these models
have yet to provide a significant, positive impact on the Egyptian economy. This

study will focus on investigating the barriers of design and innovation in SMEs
working in the creative sector in Egypt based on three assumptions: 1) creative
SMEs are playing a role in the Egyptian economy; 2) these companies are
adopting a design and innovation process in order to achieve innovation; 3) there
are barriers faced by these companies which stand as obstacles to achieving
innovation. Using these assumptions, this study posits that investigating these
barriers may contribute to recommendations that may help these companies to
improve their creativity, design process, and innovation.
According to these assumptions, this study will investigate the hypothesis that
improving design and innovation processes within the enterprise will have a
positive impact on its performance in different perspectives, including profitability,
competitiveness, and market value.
2.1 Aims and Objectives

The aim of this research is to build a clear understanding of the role of SMEs
working in Egypts creative economic sector. It will identify the different types of
barriers that these companies face to achieve innovation and compete with both
local and international competitors. Furthermore, this research aims to understand
policy formation in different countries, especially in the UK, that will work to
overcome the local barriers faced by SMEs.
The conclusion of this research aims to suggest strategies and methodologies that
can be undertaken in order to overcome the highlighted design and innovation
barriers faced by SMEs working in the creative sector in Egypt. In doing so, it can
be presumed that the performance and competitiveness of SMEs will increase
within the market.
The above aims will reflect on the project objective based on the following
highlighted key points:

Understand the barriers to design and innovation that face SMEs working
in the creative sector in Egypt;
Compare the local barriers with the barriers that face the design industry in
other countries over the course of building suggestions and
recommendations that may contribute to improving the companies
competitive position, and the building of a national design policy that can be
adopted to achieve a better ecosystem for these companies to operate;
Suggest a design policy that includes a number of recommendations aimed
at improving the design companies ability to innovate and compete in the
local and international creative markets.
2.3 Significance of the Research

The importance of this research can be highlighted on two correlated levels: the
organizational level and the economic level. While there are an increasing number
of SMEs in Egypt, many companies, especially in the early stages of organizational
development, fail to achieve success in the market. This research aims to
investigate the barriers that SMEs face from achieving innovation and how this
reflects on its market success. As SMEs play an essential role in the Egyptian
economy, the success of these companies is expected to have a positive impact
on the national economy.
Understanding the barriers to innovation can contribute to addressing these

obstacles. Through the provided suggestions and recommendations, both
companies and governments can deploy mechanisms that will have a positive
impact on SMEs performance, ability to innovate, and market competitiveness.
2.4 Definition of Terms

A number of terms were used over the course of this study. These keywords need
to be clearly defined before moving forward in this research in order to understand

the scope of this study and its target. The terms creativity, design, and
innovation are used to define the creative process conducted inside SMEs
working in the creative sector or creative industry in Egypt.
While a wide range of definitions was introduced for the above terms, these
definitions are briefly highlighted below and are accompanied by an explanation of
how they will be used in the context of this research. In addition, the methodologies
used to investigate this questions highlighted in this study will be developed and
explained.
2.4.1 Small and Medium Enterprises (SMEs)

Small and medium enterprises (SMEs) have a relative definition in different
countries. These are based on a number of factors, including the number of
employees and the companys market share. As the report by the Bolton
Committee in 1971 defined: the SME is an independent business that is managed
by its owner to part-owners. This business has a small market share (Lukcs,
2005).
Until January of 1996, SMEs were defined based on a sole factor the number of
employees. SMEs were divided into subdivisions based on the number of
employees working in the enterprise as following: micro-enterprises (1-9
employees), small enterprises (10-99 employees), and medium enterprises (100-
499 employees). In 1996, a new definition was introduced by the European Union
for small and medium enterprises based on four quantitative criteria (EC. 1996):
The total number of employees;
The annual volume of turnover;
The total assets of the enterprise;
The ownership or the degree of independency.
Based on the latter definition, SMEs are companies with a total number of

employees equaling less than 250 people. Very small enterprises are categorized
as having no more than 10 employees. Small enterprises are those with less than
50 employees, an annual turnover of less than 7 million euros, or whose total
balance assets do not exceed 5 million euro. Medium enterprises total no more
than 250 employees. Their annual turnover is less than 40 million euro, and the
total of balance assets are less than 27 million euro (Savlovschi and Robu, 2011).
The classification of SMEs in Egypt was introduced by the Egyptian Ministry of

Industry (MOI) (Zaied, 2012). It depends on the number of employees, the
business capital, and the sales turnover. This classification is based on two
categories as highlighted in Table 1. The small enterprises working in the
manufacturing and construction industries have 5-49 employees, a maximum of 5
million L.E value assets, and a maximum of 10 million L.E of sales. In the services
and trade industries, small enterprises range between 5-9 employees, have less
than 500,000 L.E value assets, and no more than 1 million in L.E sales turnover.
Medium enterprises range between 10-19 employees, possess a maximum of 2
million in L.E. value assets, and 4 million in L.E. sales turnover (El Kabbani, and
Kalhoefer, 2011).
Fixed assets,
excluding land
Labor Sales in L.E.
and buildings in
L.E.
Manufacturing and Construction
Small 5-49 5,000,000 10,000,000
Medium 50-99 10,000,000 20,000,000
Services and Trade
Small 5-9 500,000 1,000,000
Medium 10-19 2,000,000 4,000,000
Table 1. Classification of Egyptian SMEs (FinBi-Finance and Banking Consultants

International and FinCorp, 2004)
In this research, the SMEs have been chosen and based on the Egyptian definition
for the small and medium enterprises with consideration given to both the number
of employees and the capital as a shared value between different models.
2.4.2 Creative Sector

Many theories have been established to define the term creative industries, or
the creative sector. One of the first definitions was established by the UK Creative
Industries Task Force in the Department of Culture, Media, and Sport (DCMS,
1998). The term "creative industry was defined as: "those activities which have
their origin in individual creativity, skill, and talent and which have the potential for
wealth and job creation through the generation and exploitation of intellectual
property. (De Jong, Fris and Stam, 2007, p.9)
The different theories presented to define the creative industry vary based on the
actual approach used to define this industry. For example, Caves (2000, p.1)
defined the creative industry based on the output value as following:
Industries that supply goods and services that we broadly associate with
cultural, artistic, or simply entertainment value. They include book and
magazine publishing, the visual arts (painting and sculpture), the performing
arts (theater, opera, concerts, dance), sound recordings, cinema and TV
films, even fashion and toys and games.
Jacobs (2005) provided a classification for the creative industries based on four
categories: arts, media and entertainment, creative business services, and
knowledge intensive services. This definition tends to define the creative industry
cloud based on these four categorizes as highlighted in Figure 1. At the core of the
creative industry is the arts businesses, such as the visual and performing arts.

The media and entertainment industries include companies who work in the fields
of publishing, radio, film, TV, and press. The third category is comprised of the
creative business services, such as advertising and technical design. The fourth
category includes the knowledge-intensive services, such as the research
consultancy and IT services (De Jong, Fris and Stam, 2007). This classification
provides a clear understanding of the creative industries and allows researchers
to classify companies. Also, it provides a flexibility to add more businesses based
on the category structure. Based on the above definitions (and Jacobs 2005
classification, in particular), creative companies were chosen as the primary
research of this project.
2.4.3 Creativity
Many definitions of creativity have been introduced (Sarkar and Chakrabarti,
2011). According to Cox (2005), creativity is defined as the generation of new ideas
that can produce a new method of observing existing problems, find new
opportunities, exploit emerging technology, or change the market. In terms of
organizational creativity. Woodman, Sawyer and Griffin (1993, p. 293) defines
creativity as the creation of a valuable, useful new product, service, idea,
procedure, or process by individuals working together in a complex social system.
This definition has introduced a wider role of creativity inside the organization. It
extends to previous definitions as an idea to contribute in building the final product
or service.
In the field of design research, creativity exceeds the role of a new idea. Two types
of creativity have been introduced: process creativity (related to the design
process) and product creativity, which is related to the product resulting from the
design process (Taura and Nagai, 2011). This latter classification of creativity
provides a broader definition on the organizational level, as creativity is not merely
limited to creating products. During this study, this latter definition will be applied
to define creativity inside SMEs.

2.4.4 Design
The definition of design is a subject of diverse and ongoing arguments. While in
the German dictionary, design is related to the creation of forms, the English
dictionary defines design as the conception of an object, action, or project (Erlhoff
and Marshall, 2008). Cox (2005) defined design as creativity deployed to a specific
end. It transforms ideas to attractive and practical value for the end consumer.
Ralph and Wand (2009) defines the term design as a noun and a specification of
an object manifested by some agent in order to accomplish goals in a
particular environment using a set of primitive components and satisfies a set
of requirements subject to some constraints.
Taura, and Nagai (2011) provided a new definition for design that involves the
following three categories:
Category A: Drawing. This category represents the creative side of design
as it imagines a nonexistent figure and transforms this imagination into an
existing product.
Category B: Problem-solving. The term design is highlighted to define a
process, rather than an end result. This process can be considered part of
the problem-solving framework.
Category C: Pursuit of the ideal. While problem-solving aims to address
present problems, the notion of pursuit of the ideal address the future
perspective of design.
This later definition of design will be adopted during this study.
2.4.5 Innovation
Innovation is one of the most commonly used terms in different disciplines, yet
many confuse it with invention. While invention is the occurrence of a new idea,
innovation is the first commercialization of the idea. While both are closely linked,

there is a time lag between the two. This lag may take a long time to transform
inventions into innovation (Rogers, 1995), which reflects different requirements
that are needed to transform ideas into innovative products or services (Fagerberg,
2004).
Bassant (2013) indicated that innovation is about change that can take a wide
range of forms, starting from simple, incremental improvements of the product or
service, to radical changes which may involve a varied level of risks and benefits.
Innovation does not happen by accident. While the organization may get lucky
once, in order to repeat it, an organized and structured approach should be
applied. Drucker (2002, p. 5) indicated that, in business, innovation rarely springs
from a flash of inspiration. It arises from a cold-eyed analysis of seven kinds of
opportunities. These opportunities include unexpected occurrences,
incongruities, process needs, industry and market changes, demographic
changes, changes in perception, and new knowledge (Drucker, 2002).
Keeley, Walters, Pikkel and Quinn (2013) defined innovation as the process to
create a new, viable offering through understanding problems and providing
solutions. This definition has four main characteristics:
1. While innovation may involve invention, it requires other factors than simply
creating new ideas, such as understanding the consumers needs.
2. Innovation should provide a return value for the enterprise. In order to
achieve innovation viability, it should sustain itself and return its weighted
cost of capital.
3. Innovation can vary from small improvements to radical changes. Most
innovations are improvements based on previous advances.
4. Innovation is not limited to the product or the service. It should extend its
role to cover new ways of doing business.
The innovation process provides an end result of the design process. It starts with

creativity as a generator of new ideas and ends with an innovative product or
service that is a result of the design process inside the enterprise (Cox, 2005).
In this study, the three terms creativity, design, and innovation will be used to
represent the innovative ecosystem in SMEs with a focus on both design as a
process and innovation as a result of the product development process in SMEs.
3.0 Scope and Limitations

This study will focus on investigating the design and innovation barriers faced by
SMEs working in the creative sector in Egypt. As the above Definition of Terms
section aims to identify the definition of the main terms that are intended to be
discussed in this research, the Scope and Limitations section aims to clarify how
these terms are addressed in the study and the limitations that have been faced
during the research.
3.1 Creativity and Innovation

Many definitions were introduced for both creativity and innovation, leaving a
blurry edge between both terms. Taura and Nagais (2011) definition of creativity
has extended its role from generating ideas (Cox, 2005) to cover both the final
product and the design process. Cross (2006) highlighted that creative cases
which may occur during the design process are a result of expanding the
awareness of and the release of mental fixation.
While creativity is related to finding a new idea, and innovation is related to doing
or applying this idea (Clegg, 1999), the innovation process starts with the finding
of a good or creative idea (Hansen and Birkinshaw, 2007). The principles that can
be applied refer to different types of innovation (Keeley et al., 2013). In the
Egyptian market, an interchangeable usage of both terms can be observed, as
both are used to reflect the process of generating new ideas and taking it into

action, especially in the creative sector. In this study, both terms are used
interchangeably with no intended difference.
3.2 Creative Sector

The definitions of the creative sector highlighted in the Definition of Terms section
provide a wide range of industries classified as part of the creative industry. The
scope of the creative sector highlighted in this study focuses on the companies
who work in the creative industry and who design a product or service that involves
a design process as part of the product development process, while adopting one
or more types of innovation (Keeley et al., 2013). Hence, this study excluded the
artistic industry involved in producing creative work other than the design of
products and services, such as theater and music companies. An example of the
companies involved in the research include, but are not limited to, companies who
work in the field of advertising, printing, software design and IT, product design,
and architecture.
3.3 Small and Medium Enterprises (SMEs)

While both the Egyptian definition of SMEs as introduced by the Egyptian Ministry
of Industry (MOI) (Zaied, 2012) and the European definition as introduced by the
European Commission (EC. 1996) use the number of employees, the sales
turnover, and the total assets as criteria to classify enterprises, there is a significant
difference in terms of the number of employees and the sales turnover between
both models. Additionally, the Egyptian definition adds an additional classification
based on the industry niche in the manufacturing and construction industries, as
well as in those dealing with services and trade (El Kabbani and Kalhoefer, 2011).
In terms of the size of the enterprise, the Egyptian definition for SMEs proposed
that small enterprises start with 5 employees in both the service and trade and the
manufacturing and construction industries (El Kabbani and Kalhoefer, 2011).

However, many of the design enterprises (including start-ups and design studios)
may run based on a smaller number of employees, which follows the European
Commissions definition (EC. 1996). Some definitions consider this type of
enterprise as micro (Zaied, 2012). In this study, the Egyptian definition of SMEs is
used and affects the choice of the companies contributed to the research and the
collected data. It also considers the enterprises with less than 5 employees as part
of the studys scope, according to the European Commissions definition of SMEs.
4.0 Research Methodology

This section of the research includes information about the research methods used
in this study, how each method is designed, and how the information was collected
from the research attendees. The research conducted in this study is based on
both secondary and primary research methods in order to understand the different
barriers on design and innovation in SMEs working in the creative industry in Egypt
as following the scope and limitation highlighted in above section.

The literature review shows that a wide range of innovation studies have focused
on the traditional manufacturing and technology industries, while the more recent
studies have started to examine innovation in the service sector and at a more
organizational level. However, few studies have been conducted on innovation
within the creative sector (Miles, and Green, 2008). An even higher lack of studies
can be observed in the Egyptian creative sector, as there is a general deficiency
in the research and development of different sectors, including the creative
industry with a better opportunity for the IT sector (Bond, et al, 2012).
The literature review search was conducted during the months of April, May, June
and July 2015. As highlighted earlier in the Scope and Limitation section, a lack of
literature focuses on SMEs working in the creative industry (Bond, et al, 2012).

Accordingly, the literature review used in this study covers the SMEs ecosystem
and the innovation business generally, without focusing on a specific industry.
The study also investigated literature regarding the barriers to innovation in the
SMEs working in the creative sector in UK and Europe in order to examine the
different solutions models provided by these countries.
The secondary research methods used to investigate the literature review include
book and journal publications available in the Staffordshire University database,
the American University of Cairo library database, and the open-access resources
available on academic publishing databases, such as Google Scholar,
Researchgate.net, and Academia.edu. Additionally, the literature review related to
the Egyptian SME sector was reached through the American University in Cairos
database, the Egyptian government publications, and the Bibliotheca
Alexandrinas (Library of Alexandria) database.
In addition to the above resources, online articles and publications were used to
reach more information about the design and innovation in the SMEs working in
creative industries. The online resources were also used to reach information
about the Egyptian economy and build an understanding of the economic impact
of the SMEs working in the creative sector in Egypt.
4.2 Quantitative Research

The primary research in this study consists of both quantitative and qualitative
research methods. The first set of quantitative data was collected through a
questionnaire, as the study uses a survey research strategy (Walliman, 2005). It
aims to learn information about a participant who can be considered a
representative sample of the SMEs working in the creative industry in Egypt. The
questionnaire also aims to investigate the status of the design and innovation of
the enterprise, and identify the barriers faced by companies in this domain. A

number of interviews was conducted with some of the questionnaire participants,
company owners, and design leaders as part of the qualitative research within this
study in order to investigate the barriers that face creative SMEs in Egypt and
present a hindrance for the design and innovation processes.
4.2.1 Questionnaire Design

The questionnaire consists of 32 questions. They are organized into seven parts
based on their topics covered. The first part of the questionnaire included a
consent form in order to provide clear information about the questionnaire for a
participant and get approval. Questions about the enterprise were added in order
to examine the type of enterprises being studied.
Factual questions were added to the questionnaire in a form of multiple choice

questions in order to examine the participants experience regarding the barriers
to design and innovation in their enterprises as owners or employees (Ritter and
Sue, 2007). A part of the questions was designed based on the summated rating
scale (Likert scale) in order to understand the user rating for statements related to
design and innovation inside the enterprise. Both categorical and numerical scales
were used in the rating questions (Kumar, 2005).
The questionnaire is designed and made available through Surveymonkey.com,

and online survey platforms that allow survey design, the collection of responses,
and the analyzing of results. The questionnaire was created in both Arabic and
English, as Arabic is the mother tongue in Egypt. Both English and Arabic copies
of the questionnaire are identical and involved only translating the questions
without changing its context. A copy of both the Arabic and English versions of the
survey is available in the appendix of this study.
4.2.2 Participants
The population sampled in this research represents the individuals who take a

creative or executive role, or those who own a national small or medium enterprise
in Egypts creative industry. The creative role varies from creative directors, art
directors, and senior designers. Feedback has been taken from those in other
creative roles who have a current or previous understanding of the situation of the
barriers that enterprises face and affect its ability to design or achieve innovation.
There is a noticeable lack of information about the SMEs working in the creative
industry in Egypt, in addition to the fact that many of these companies are not
officially registered, which makes it hard to find information regarding the number
of these enterprises in Egypt. Therefore, a non-probability sampling method was
used to select the sampling population, as the number of elements in the
population could not be identified (Kumar, 2005).
Due to the lack of resources that archive the SMEs working in the creative sector
in Egypt, the sample population was selected from different sources, including the
web search and snowball sampling as a non-probability sampling method
(Goodman, 1961). Based on the snowball sampling, personal connections were
asked to fill in the questionnaire and forward it to their connection in order to reach
more participants (Kumar, 2005). The questionnaire link was sent to the participant
through email, Skype, and social network websites, including Facebook, Twitter,
and LinkedIn. Also, the questionnaire link was shared with the design communities
located on the above mentioned social networking websites.
Additionally, a paid campaign has been created on Facebook to reach the

population from outside the participants personal connections and to reach more
cities outside of Cairo. The campaign targeted the individuals who work in the
creative industry and have a creative role or own a small or medium enterprise.
The demographic information targeted in the campaign included both males and
females whose ages range from 20 to 50, live in Egypt, and use an Egyptian IP
address to access Facebook. Both Arabic and English-language speakers were
targeted in this campaign.

4.3 Qualitative Research
Interviews were conducted during this study in order to collect qualitative data
about the barriers facing design and innovation in the SMEs working in the creative
sector in Egypt. The aim of these interviews is to gather further insight to the
obstacles that enterprises face and validate the results collected through the
quantitative part of the research.
4.3.1 The Interviewees

The interviewees were selected from a personal network and the questionnaire
participants. Six interviewees were selected and agreed to conduct the interview
from different creative industries: two from the advertising field, one from printing
design, one from software design, one from website and application design, and
one from the field of architecture design. Two of the interviewees are industry
leaders with scholarly positions as professors of design, which contributed to a
greater understanding from both the industrial and academic perspectives. The
interviewees represent both small and medium enterprises in the above-
mentioned industries. They operate in both the cities of Cairo and Alexandria. One
medium company has an operation partner in the State of Kuwait in the Gulf area.
4.3.2 Interview Design

The interviews were conducted through Skype or phone calls. Some of the Skype
interviews used both audio and video, but some of the interviewees preferred to
use only audio due to Internet connection difficulties. The length of the interviews
ranged from 1-2 hours based on the interviewees feedback during the session.
While the interviews were based on predefined questions highlighted in the
appendix of this study, these questions were used as general guidelines. Part of
the interviews involved open-discussion in order to allow the interviewees to
explain their own insight about the obstacles they suffer over the course of
achieving innovation inside their enterprises.

Five out of six interviews were voice recorded. One interview was conducted
through phone and could not be recorded. However, short, written notes were
taken for all interviews in order to highlight the main issues addressed by the
interviewees. Both Arabic and English languages were used during the interview.
The questions were mainly written in English, and were then translated to the
interviewees into Arabic as needed.

This section of the study will investigate the literature review related to the intended
research regarding the barriers faced by SMEs working in the creative industry in
the Egyptian economical ecosystem. In order to understand these barriers in the
context of the Egyptian economical ecosystem and build an initial perception on
the impact of this study on the Egyptian economy, the literature review will
investigate the status of the Egyptian economy, the contribution of SMEs in the
national economy, the literature investigation of the barriers faced by these
enterprises, and the status of innovation in Egypt. In a related context, this section
will investigate the literature review related to the barriers faced by creative SMEs
to achieve innovation in the global market.
5.1 The Struggling Economy in Egypt

In order to understand the importance of this study for the Egyptian economy and
how overcoming the barriers faced by SMEs working in the creative sector in Egypt
may contribute to the overall improvement of the national economy, this part of the
literature review investigates the economic statistics within Egypt. It especially
focuses on the last decade, highlighted by two major events: the global financial
crisis (Sharma, 2010) and the 2011 Egyptian revolution (Hosny, Kandil and
Mohtadi, 2014).
Although GDP growth rate data is varied, a high rate of growth within the Egyptian
economy could be observed before the 2011 revolution (Hosny, Kandil and
Mohtadi, 2014). In 2008, the Egyptian economy was hit hard during the financial
crisis, displaying a broad impact on the Egyptian economy in the form of a drop in
export revenues, a contraction in the tourism industry, and a reduction in the Suez
Canal tolls (Sharma, 2010). According to the World Bank (2016), the annual GDP
growth rate dropped from 7.2% in 2008 to 4.7% in 2009, and the annual inflation
(GDP deflator) dropped slightly from 12.2% in 2008 to 11.2% in 2009. Additionally,

both the import and export percentage of the GPD have significantly declined
between the years 2008 and 2009 (Dahshan, 2015).
The other major shock for the economy was in the year 2011, which started with
the so-called 25th of January Revolution, as millions of Egyptians stormed the
streets with one unified slogan: Bread, freedom, and social justice. This indicates
the important role of economic conditions as one of the stimuli that lead to this
major uprising (Dahshan, 2015). It seems as though the Egyptians economic
concerns were a higher priority than achieving the process of democratization
(Springborg, 2011).
While the annual GDP growth percentage has slightly increased to 5.1% after the
global financial crisis-led drop in 2008-2009, it was dramatically affected by the
revolution and dropped to 1.8% in 2011. Growth remained stagnant or low until
2015, when it reached 4.2% (World Bank, 2016), highlighting the fact that the
economy is still struggling four years after the revolution.
In the years after the revolution, the GDP contributions from importing and
exporting goods and services continue on a varied low rate compared with the
years before the global financial crisis. The import and export of goods and
services recorded around 40% and 33% in year 2008, respectively (Dahshan,
2015).
The Egyptian revolution was part of a large series of events known as the Arab
Security presented a significant barrier to economic growth during the years after
the revolution, due to terrorist attacks and threats that had various impacts on
different sectors. For instance, the export of gas to Israel and Jordan has been
interrupted by a series of explosions along the Sinai pipelines (Springborg, 2011).

5.2 SMEs and the Economy
Many research studies have highlighted the key role that SMEs play in national
economies (Birch, 1989; Bommer and Jalajas, 2002; Lukcs, 2005; Oke, Burke
and Myers, 2007; Nauwelaerts, Antwerp and Hollaender, 2012). In the European
Union, SMEs represent 98% of the economy, with an estimated 19.3 million
enterprises defined as SMEs. 93.2% of this value (18 million enterprises) are
classified as small enterprises with less than 10 people, and 35,000 enterprises
are classified as medium-size. These companies contribute to the economy by
providing nearly 65 million jobs. 66% of the employment in Europe is allocated for
SMEs. Among SMEs, micro enterprises account for 34%, small enterprises
account for 19%, and medium-sized enterprises account for 13% (Lukcs, 2005).
In particular, the UK government is giving attention to this and aims to encourage

innovation within SMEs (Oke, Burke and Myers, 2007). Cox (2005) highlighted that
SMEs make up 50% of the UKs GDP and represent a significant percentage of
the countrys entrepreneurial base. 66% of the companies working in the creative
industries are micro enterprises with one owner, 27% are micro enterprises with 2-
10 employees, 6% are small enterprises with 10-50 employees, and 1% are
middle-size enterprises with more than 50 employees (Braams and Urlings, 2010).
Another important role of SMEs in the economy is the extension of the technical
innovation in the national economy, as many of the jobs come from the new and
innovative discoveries (Savlovschi and Robu, 2011). Paul Almeida, a Professor at
Georgetown University, thinks that, SMEs play a unique, active and critical role in
the innovation process by their ability to invent in the new technological space and
to improve the high technology information networks (Almeida, 2004).
5.3 SMEs in Egypt

SMEs represent around 90% of the Egyptian private sector enterprises. However,

their share in the net private manufacturing is only 7.5% (El Kabbani and
Kalhoefer, 2011). This percentage represents a significant source of growth in the
national economy and provides a sufficient contribution to GDP growth (Hussein
and Bremer, 2014).
The majority of the Egyptian SMEs are located in five areas: Cairo, Giza, Dakahlia,
Alexandria, and Sharqiya, with the majority working in the trade industry because
of its low barriers in terms of capital, technology, and skills. El Mahdi and Rashas
(2006) indicated that 41% of SMEs operated in an informal situation (they are not
registered with the authorities, nor do they have a legal form) in the year 2006 (El
Kabbani and Kalhoefer, 2011). SMEs serve the community by providing job
opportunities. Based on the CAPMAS census of establishments in 2006, there are
2,450,903 SMEs established in Egypt that offer jobs for 7,254,033 workers. In
Cairo, there are 355,988 established SMEs that offer 1,298,892 opportunities for
workers (Hussein and Bremer, 2014). Table 2 summarizes these figures below.
Egypt Cairo Non-Cairo Giza

Establishments 2,450,903 355,988 2,094,915 136,739
Workers 7,254,033 1,298,892 5,955,141 442,744
Table 2. The number of SMEs and their workers (Hussein and Bremer, 2014)
While different literature studies have researched SMEs in Egypt, there are a lack
of studies that focus on the creative SMEs. The majority of the available literature
researches SMEs in general without specifying the information associated with
each industry.
5.4 Barriers Faced by SMEs in Egypt

There is a lack of studies covering SMEs working in the creative industries in
Egypt. Literature studies have highlighted the barriers that face SMEs in Egypt

generally without specifying their specific industry. The literature has indicated two
main types of barriers: financial and non-financial barriers (El Kabbani and
Kalhoefer, 2011; Hussein and Bremer, 2014).
5.4.1 Financial Barriers

Financial barriers lay at the top of those faced by SMEs (El-Said, Al-Said and Zaki,
2015). Nasr (2008) highlighted that 37% of the enterprises consider access and
the cost of finance major obstacles for their growth. Only 17.4% of SMEs have
access to support provided by the financial sector. Among those, only 13% of the
small enterprises has access to finance compared with 36% of the large
enterprises.
In relation to the financial barriers faced by SMEs, the lack of export insurance and
the banks reluctance to provide export-related finance due to the doubts about the
genuineness of the export order presents another barrier for SMEs who seek to
access the international market (El-Said, Al-Said and Zaki, 2015). Moreover, the
lack of financial knowledge presents a barrier for SME owners, which compounds
the problem of the banks opposition to lending for those companies (Hussein and
Bremer, 2014).
5.4.2 Non-Financial Barriers

SMEs in Egypt also face non-financial barriers, including the complex regulation
required to license their firms. They are required to follow long bureaucratic
procedures in order to operate legally. The regulations include redundant
documents from different governmental bodies. Al Zaiaty (2010) indicated that
these permissions are temporary and only last for three years. Other barriers
include high social costs added for registered firms, weak marketing, and
unsuitable logistic systems serving these enterprises (Hussein and Bremer, 2014).
Some barriers were identified as high obstacles for SMEs in specific industries.
For instance, Zaied (2012) highlighted technical barriers, legal obstacles and

regulations, Internet security, and limited usage of Internet banking as inhibitors
faced by SMEs working in Egypts commerce industry.
5.5 Innovation
Literature studies have suggested a positive relation between innovation and
different success factors inside SMEs, including but not limited to profitability (e.g.
Heunks, 1998; Cho and Pucik, 2005), economic growth (e.g. Flew, 2002; Puchta
et al, 2010), performance (Rosenbusch, Brinckmann and Bausch, 2011), and
competitiveness (e.g. Oksanen and Rilla, 2009). However, different definitions
were introduced to define innovation (Baregheh, Rowley and Sambrook, 2009).
One of the early definitions for it was introduced by Thompson (1965, p.2) as, the
generation, acceptance and implementation of new ideas, processes, products or
services. Damanhour (1996, p.694) provided a detailed definition of innovation as
following:
Innovation is conceived as a means of changing an organization, either as

a response to changes in the external environment or as a pre-emptive
action to influence the environment. Hence, innovation is here broadly
defined to encompass a range of types, including new products or services,
new process technologies, new organization structures or administrative
systems, or new plans or programs pertaining to organization members.
Studies have been introduced to investigate these types of innovation. The OECD
(2005) defined the types of innovation based on the objects of product, process,
market, and organizational innovation (Varis and Littunen, 2010). Keeley, et al.
(2013) introduced the ten types of innovation framework, which are categorized in
three ways: configuration, offering, and experience. 1) The configure category is
related to the inner part of the enterprise business system, and it includes four
types of innovation: profit model, network, structure, and process. 2) The offering
category focuses on the types of innovation related to the enterprise of core

products and services and it includes product performance and product systems.
3) Experience innovation focuses on consumer-facing elements and it includes
service, channel, brand, and consumer engagement.
5.5.1 Benefits of Innovation Exploitation in SMEs

Studies have argued that innovation is the key distinguishing attribute comparing
with the administrative and other organizational disciplines within the business
(e.g. Schumpeter, 1982; Davidsson, 2004). Furthermore, creative-practitioner
literature studies suggest that innovation is the only solution for SMEs to survive
the hyper-competitive markets (e.g., Kim and Maubourgne, 2005). Rosenbusch,
Brinckmann and Bausch (2011) have found that innovation has a positive effect
on the performance of SMEs.
5.5.1.1 Innovation and Profitability

Studies have highlighted the importance of adapting innovation and creativity in
SMEs in order to achieve success (Heunks, 1998). These enterprises ability to
innovate represents the key driver of a better and more competitive position in the
market and the firms financial performance, which can reflect on it in the forms of
growth, profitability, and market value (Cho and Pucik, 2005). In a comparison with
the non-innovative firms, many studies have suggested that innovators are more
profitable than non-innovators (Geroski et al., 1993; Leiponen, 2000; Cefis and
Ciccarelli, 2005; Oksanen and Rilla, 2009) because of the innovative firms ability
to protect their new products from the market competition, thereby negatively
affecting the non-innovative firms. Geroski et al. (1993) and Leiponen (2000)
suggested that this profitability is a result of the innovative firms ability to acquire
superior internal capacities (Love, Roper and Du, 2009).
While studies have indicated that superior quality should be maintained in order to
achieve new product success in the market (Cooper, 1990; Cooper and Brentani,
1991; Cooper and Klienschmidt, 1995, 1996), Cho and Pucik (2005) suggested an

innovativeness-quality-performance model, where the term innovativeness
instead of innovation is used to refer to the process of "exploring something new
that has not existed before (Cho and Pucik, 2005, p. 556). This model suggests
that the enterprises ability to balance innovativeness with quality leads to more
growth and profitability for the organization.
5.5.1.2 Innovation and Economic Growth

While innovation presents a primary source of growth in traditional industries, this
role becomes more dominant in the creative industries and requires the existence
of social, cultural, and institutional modernizations (Flew, 2002). Flew (2002)
highlighted in his book, The Rise of the Creative Class and How Its Transforming
Work, Leisure, Community and Everyday Life, that areas with a high number of
creative individuals are able to achieve economic growth when compared with
areas possessing a lower number of creative individuals (Puchta et al, 2010).
Studies have shown that shifting toward innovation rather than efficiency can
provide a key driver for growth, business success or failure (Hotho and Champion,
2011). The changes in the market and the strategies adopted by larger enterprises
increase the pressure on SMEs to focus on innovation, their enterprise-innovation
capabilities, and the innovation of management McAdam, McConvery and
Armstrong, 2004). Additionally, the rapidly changing technologies increased the
need for SMEs to innovate through adopting strategic approaches and effective
innovation management skills in order to survive and achieve prosperity in the long
run (ORegan, Ghobadian and Sims, 2005)).
5.5.1.3 Innovation and Market Competitiveness

Studies have shown the positive impact of innovation activities in terms of
profitability and market competitiveness for SMEs (Oksanen and Rilla, 2009). Cho
and Pucik (2005) indicated that the companys ability to create a balance between
both innovativeness and quality can foster its ability to achieve sustainable growth,
improve profitability, and create superior market value, which will all contribute to

achieving sustainable competitiveness. Many CEOs believe that developing new
ideas and innovations are at the top of their organizations priorities (Porter, Stern
and Council on Competitiveness, 1999). Lawson and Samson (2001) observed
that the emerging knowledge economy, global competition, and technological
advancement promote innovation to be at the center of organizational
competitiveness, as innovation is the method that firms use to produce new
products, processes, and systems required to meet the market changes and
challenges (DAveni, 1994; Dougherty and Hardy, 1996; Utterback, 1994).
5.5.2 Barriers to Innovation in Creative SMEs

Although there is a lack of literature that investigates the barriers faced by creative
SMEs in Egypt, studies have investigated the barriers to achieving innovation and
creativity in SMEs in other countries, including the United Kingdom (Larsen and
Lewis, 2007), the United States (Acs and Audretsch, 1990), Sweden (Ylinenp,
1998), Spain (Madrid-Guijarro, Garcia and Van Auken, 2009), and Canada
(Baldwin and Gellatly, 2003). The barriers to innovation and creativity that were
highlighted in these different studies can be classified into two main types: internal
and external barriers. However, some barriers may fall under both categories, such
as the financial barriers (Larsen and Lewis, 2007) and the unpredictable success
(Nauwelaerts, Antwerp and Hollaender, 2012) as highlighted in Figure 1. This part
of the literate review investigates the different studies that have highlighted these
barriers with a focus on SMEs working in the creative industries.

Figure 1. The relation between internal and external barriers of creativity and
innovation.
5.5.2.1 Financial Barriers

Different studies have identified the financial barriers as one of the most significant
hindrances to innovation in SMEs (Nauwelaerts, Antwerp and Hollaender, 2012;
Larsen and Lewis, 2007; Madrid-Guijarro, Garcia and Van Auken, 2009). Barley
and Niktari (1995) highlighted five reasons for SMEs failure in relation to financial
factors: under capitalization, short-term liquidity problems, insufficient working
capital, insufficient start-up capital, and poor financial management (Larsen and
Lewis, 2007). Based on these issues, the financial barriers may fall under both
internal and external barriers. Feel (2000) observed different barriers, including the
high attendant risk, higher monitoring costs, and the inability for the fund providers
to adequately assess technological validity or project viability. The risk of the
innovation investment (Hausman, 2005; Frenkel, 2003) stands as a barrier for
SMEs with limited assets to invest in the innovation process (Madrid-Guijarro,
Garcia and Van Auken, 2009), as investors and commercial banks are reluctant to
provide the financial support to SMEs due to their high risk profile (Zhu, Wittmann
and Peng, 2012). The above mentioned factors stand against SMEs ability to

develop the innovation process inside the organization (Acs and Audretsch,1990).
5.5.2.2 Marketing Skill Barriers

SMEs may focus on the technical aspects of the innovation process at the expense
of other factors, including the marketing skills required to turn innovation into a
successful product (Foley and Green, 1995; Freel, 2000). Studies have shown that
the technical and innovation skills inside SMEs come before the cost of the
marketing skills required to achieve successful commercial exploitation, which
need to be avoided as SMEs adopt a consumer-driven culture in order to achieve
success (Larsen and Lewis, 2007). Within the enterprise, marketing presents a
barrier for innovation and creativity in terms of a number of factors highlighted by
Freel (2000), which includes the poor planning and financial estimation for the
marketing costs (Barber, Metcalfe and Porteous, 1989), lack of functional
expertise, discontinuity of management staff (Nooteboom, 1994), and the
insufficient marketing endeavors as the process is based on word-of-mouth
(Oakey, 1991).
5.5.2.3 Management Barriers

The lack of management skills is identified as one of the impediments behind the
failure of many SMEs (Birley and Niktari, 1995) as a result of different factors,
including management experience, skills, determinations, and judgment (Larsen
and Lewis, 2007). As the innovation process disrupted the existing projects running
in the organization (Shanteau and Rohrbaugh, 2000), managers are expected to
commit to the innovation process (Acemoglu and Pishke, 1999) in order to achieve
success. In SMEs working in the creative industries, management knowledge is
closely linked to business, economic, financial, and legal knowledge (Nauwelaerts
and Antwerp, 2012).
5.5.2.4 Human Resource Barriers

Different studies have highlighted the role of employee resistance to innovation as

one of the barriers facing the adoption of an innovation culture inside the
organization (Madrid-Guijarro, Garcia and Van Auken, 2009). This is due to poor
communication, existing practices, and the lack of commitment to innovation praise
by the top management (Zwick 2002; Osterman 2000; Kane, Crawford, and Grant
1999). The resistance for change and innovation can be a result of inadequate
training or poor employee skills (Baldwin and Lin, 2002). On the managerial level,
the small business managers education and training related to innovation is
closely linked to building a successful innovation strategy in the organization
(Housman, 2005). Feel (2002) detailed the enterprises ability to attract, train, and
retrain managers who are qualified to incorporate innovation strategies inside the
organization as a closely related factor to the organizations ability to adopt
innovation (Freel, 2000).
5.5.2.5 Other Barriers

In addition to the aforementioned, there are other internal and external barriers
faced by SMEs over the course of achieving innovation. The unpredictability of
success presents a barrier for SMEs, given the risky nature of innovative products.
In Germany, 67% of the creative enterprises agree that uncertainty is one of the
great hindrances of innovation. While investors are willing to provide to funding
creative firms, it is hard to evaluate their investments and acquire knowledge
regarding the potential risks (Nauwelaerts and Antwerp, 2012). In China, SMEs
face different barriers such as the lack of and/or unclear regulations even after
passing laws like the SME Promotion Law presented by the Standing Committee
of the National Peoples Congress, the excessive taxation that hinders firms ability
to achieve innovation, and the insufficient support system. Although China
introduced a series of support systems for SMEs to undertake R&D and adopt
innovation, SMEs complained that it is not easy to benefit from these programs
(Zhu, Wittmann, and Peng, 2012).

5.6 Design Policies
Creative industries can play an essential role in the economic growth of countries.
Also, past studies have highlighted the creativity impact on the business
performance (Cox, 2005). Based on this assumption, different countries have
started to adopt national design policies in order to improve the performance of the
creative enterprises and overcome the barriers they face. Examples of these
countries include the UK, Denmark, Germany, Italy, India, Finland, Mexico, South
Africa, South Korea, and the United States (See, 2016). This part of the literature
review investigates the different design polices in order to understand how different
countries reacted to the design and innovation barriers and adopted plans to
overcome them. Based on the assumption that creative SMEs in Egypt may face
similar barriers to the creative firms from other countries, this literature review will
be used in this study to reflect this understanding in a form of suggestions and
recommendations that may contribute to overcoming the investigated barriers.

Table 3. Areas of operation of a national design policy (Qian, 2010)
While there are different characteristics of the adopted design policies, Ferreira
(2011) categorized the different design polices based on the regulation taken into
six polices: subsidizing, investing, accreditation/leadership, promotion, curriculum
skills, and public awareness (see Table 3). Policy A (subsidizing) involves the
governmental assistance or the charities funding for firms in order to stimulate
their growth (Todaro and Smith, 2009). Policy B (investing) aims to promote the
effective use of design through building design associations and networks that can

assist and consult with other firms to unitize design as a strategic tool. Policy C
(accreditation and leadership) involves providing accreditation in a form of
certification for the good-design practices in an effort to improve the
competitiveness of the enterprise (Temple and Swann,2006; Gemser and
Wijnberg, 2003; Whan, Kyung-Won and Ki-Young, 2009). In Policy D (promotion),
the government plays an essential role in promoting individual designers, design
firms, and products (Park, Nam and Chung, 2010). Policy E (curriculum skills)
secured the source of human capital and talent development required to apply the
design policy through a clear understanding of the role of design in business. The
last, Policy F (public awareness), involves increasing the publics awareness of
design and the sponsoring of related activities.
Different countries such as the UK have adopted a combination of the above

mentioned polices in order to improve contributions of design and innovation to the
economy. The UKs policy introduced a number of procedures that include tackling
the issues related to awareness and understanding, which follows the policy of
category F (public awareness), improve the governments support for its domestic
companies (Policy A, subsidizing), improve design education and broadening the
understanding of design skills (Policy E, curriculum skills), and encourage the
imaginative designs of suppliers (Policy D, promotion). The Design Council was
considered part of the British policy under Policy A (subsidizing), which includes
governmental support and consultations for design agencies (Cox, 2005).

6.0 Findings and Analysis
This part of the study discusses the major findings, starting with overviewing the
questionnaire responses from both the Arabic and English copies, and then
analyzing the visual charts and diagrams based on the data collected from the
responses both language versions. Following the presentation of the findings, an
analysis of both the quantitative and qualitative data are presented. The questions
have been organized into six categories, whereby the first category represents
optional personal information for the respondents for further communication
purposes.
The five following categorizes are represented below without being restricted to
the exact order presented in the main questionnaire. The answers were reviewed
and validated. Some participants marked their answers as Other. while there is
a representative for their choice in the main questions, those answers were
merged with the main choices.
6.1 Background on Participant Companies

In order to build an understanding on the participants of the survey, a number of
questions were provided in the beginning of the questionnaire to learn more about
the participant companies profiles. This subsection aims to understand
information about the companys name, age, location, number of employees,
capital, employee wages, the creative titles in the company, creative business
niche, target market, and the internal creativity and innovation levels.
6.1.1 The firms age

This question assumes that the age of the firm in the market can provide
information about its maturity, the time it spends in the business, and
subsequently, the type of barriers they face. Based on this assumption, a total of
28 answers were collected to understand the participants maturity. 8 participants

(28.6%) have indicated that their business is less than 2 years old. 12 participants
(42.9%) indicated that their firms are 2-5 years old. 1 participant (3.6%) has a
business that is 5-10 years old. Finally, 7 participants (25%) have a business older
than 10 years. These percentages reflect the varied establishment dates for
companies working in the creative industries. 71.5% of the companies were
established less than 5 years ago, while 40% of the companies were established
more than 5 years ago (see Figure 2).
25% 28%
Less than 2 years
2-5 years
4% 5-10 years
More than 10 years
43%
Figure 2. The firms age
6.1.2 The estimated firms capital

In terms of the firms capital, 26 responses were collected. 14 participants (53.9%)
have less than USD 10,000 working capital. 4 participants (15.4%) have a working
capital between USD 10,000 and USD 100,000. 1 participant (3.9%) has capital
between USD 100,001 and USD 500,000. 6 participants (23.1%) answered they
dont know the capital of the firms they work in (see Figure 3). Finally, 1 participant
(3.9%) specified that their firms capital only includes the infrastructure required to
run the business, including the building and equipment, such as the computers.
These results indicate that creative SMEs are usually established with an initial
capital of less than USD 10,000. Interviewees have also highlighted that many of

the creative small firms are based on the least capital possible, and business
owners contribute in the development process, as these firms can be established
informally as a partnership between friends or family members.
4%
Less than $10,000

23%
$10,000 - $100,000
$100,001 - $500,000
0% 54% More than $500,000

4%
I don't know
Other (please specify)

15%
Figure 3. The estimated firms capital
6.1.3 Number of employees

The number of employees plays an essential factor in categorizing the small and
medium enterprises. The Figure 4 below shows the number of employees of the
participating companies.

0% 0%
4%
4%
Less than 10
10 and 99
29% 100 and 250
More than 250
63% I don't know
Figure 4. Number of employees
In a cross-tab analysis between the number of employees and capital, the majority
of the creative firms are considered to be a micro and small size, as 63% of the
participants indicated that their firms include less than 10 employees, while 29.7%
have between 10 to 99 employees. The capital of the participants didnt exceed
the amount of USD 500,000, which defines them as SMEs based on the Egyptian
definition of the term. The results here indicate that creative firms depend on a low
number of employees compared with other industries. One of the interviewees
pointed out that creative companies may only depend on one designer who runs
the company business, and it can run in both a formal form as a micro firm or in an
informal form as a freelance business.
6.1.4 Firms locations and branches

In order to understand the geographic distribution for creative SMEs in Egypt,
questions about the firms location and branches were address in the
questionnaire. As shown in Figure 5, a majority of the firms (57.1%) are located in
Cairo, which is the capital and largest Egyptian city, where a majority of the
business opportunities are expected to be located. However, the results indicated

there are a significant number of creative SMEs that are located outside the capital
in cities of various sizes, such as Alexandria (the second largest city in Egypt),
Mansoura, Obour City, Shebeen EL Koom, Bahaira, and Damiaat. One of the
participants indicated that his company does not have a fixed location, which is a
known case for informal micro companies in Egypt, especially when it is run and
managed by just one person.
43%
Cairo
Outside Cairo (please specify)

57%
Figure 5. Firms locations and branches
No international branches were identified for the participants, which is due to the
low nature of assets and the business of the SMEs. This is because there is a low
capital investment and few employees to handle the opening of multiple branches.
One of the interviewees indicated that her company is partnering with another in
Kuwait in order to expand their target market which, can be considered one of the
business forms that creative SMEs involve themselves in in order to reach
international markets.
6.1.5 Target business

In relation to the companys location, the target business was also investigated in

order to understand more about the markets that are targeted by the creative
SMEs in Egypt. While all the SMEs target the local market, other SMEs are able
to extend their business to international markets, such as the Middle East, which
is targeted by 42.9% of the participant SMEs; North Africa, which is targeted by
7.1% of the participants; and Africa, which is targeted by 3.6% of the participants
as shown in Figure 6 below. In a cross-tab analysis with the question about the
firms branches, creative SMEs are able to extend their target market without the
need to have international branches. This depends on other tools, which may
include business connections, collaboration with larger companies, and the use of
technology tools, such as the Internet to find international clients.
120.0%
96.4%
100.0%
80.0%
60.0% 42.9%
40.0%
20.0% 7.1% 3.6% 3.6% 3.6% 3.6%
0.0% 0.0% 0.0%
0.0%
Figure 6. The target business
Another observation is that the creative SMEs in Egypt are more likely to extend
their target markets outside of the domestic market to others that are in the same
geographic area, such as Middle East. The Middle Eastern countries especially
the Gulf countries are considered an important market for creative SMEs.
6.1.6 Correlation between size and market reach

A cross-tab analysis of the relation between the market reach and other firms

characteristics includes the number of employees, age, and capital. There exists
a correlation between the firms age and ability to extend its business to
international markets, as firms that are more than 10 years old were able to extend
their business to other markets in the Middle East, North Africa, and Africa. In terms
of the number employees, is no significant correlation can be observed, as firms
with less than 10 employees were still able to extend their business to international
markets. Also, there is no evidence of a correlation between the firms capital and
the market reach, as companies with less than USD10,000 were able to extend
their business to international markets as well. This concludes that, as firms grow
older in business, their business is driven to more international markets.
6.1.7 The firms business niche

As the creative SMEs in Egypt work in different fields, participants were given the
choice to define more than one business niche for their firms. The choices focused
on the creative industries that are related to design and innovation businesses,
rather than the businesses irrelative to the study, such as theater and performing
arts. Figure 7 below indicates that a majority of the participants define their
business as a design agency, while the technology-related niches (IT and
software, web design, and mobile applications) represented the second majority
of the participants (18.8% and 21.9%), respectively.

60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Web design, mobile
Architecture and interior
Product design
Social innovation

Service design
Design agency
IT and software
Fashion design
Visual arts and crafts

applications
design
Figure 7. The firms business niche
Based on the collected data, firms tend to diversify their business niche by offering
related services and products to those requiring a similar skill set. For instance,
one of the participants provides services related to architecture and interior design
in addition to industrial buildings architecture. One of the interviewees indicated
that her firm focuses on both IT and software in addition to web design mobile
applications. The answers also indicated that no significant correlation exists
between the business niche and the above firm characteristics, including the
number of employees, capital, or location.
6.1.8 Creativity and Innovation in the firms

In order to identify how a firm sees creativity and innovation inside the organization,
participants were asked to evaluate their firms creative and innovation abilities
based on five weighted values: very low (1), low, moderated (2), moderated (3),
high (4), and very high (5). In terms of creativity, a majority of the firms evaluated
their creative ability as moderate (53.6%), and 35.7% evaluated their firms
creativity as high. The weighted average for creativity is 3.46. Innovation has a
similar result, as a majority of participants evaluated the innovation inside the

organization as moderate (44.4%) and high (37.0%), with a weighted average of
3.41 (see Figure 8).
Innovation
Creativity
3.38 3.39 3.40 3.41 3.42 3.43 3.44 3.45 3.46 3.47
Figure 8. Creativity and Innovation in the firms
The results indicate there is a moderate amount of satisfaction regarding the levels
of creativity and innovation inside the firms. However, this satisfaction can be
improved in order to reach a higher level of creativity and innovation within the firm.
6.1.9 Designers wages and titles

Designers present the core for the creative team working in creative SMEs.
However, in order to identify how the designers are evaluated, the participants
were asked to rate the designers wages compared with the other career titles in
the company. A majority of the participants rated the wages offered for designers
as moderate (69.2%), while 26.9% stated that the wages are considered high
compared with other titles in the company as shown in Figure 9. One of the
interviewees highlighted that, in industries such as IT, software, and web and
mobile design, the designers wages are considered lower than the developers
who work in the development team.

4%
27%
Low
Moderate
High
69%
Figure 9. Designers wages
In terms of the design titles working in the creative companies, the Figure 10 below
shows that a majority of the jobs are located in the early career level, including
junior and senior designers, while the managerial level titles have a low
representation in firms. These latter titles include the art director (23.1%) and
creative director (11.5%). These results reflect the nature of SMEs. The companies
depend on a small team and limits the designers titles available in the firms
structure.

60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Figure 10. Designers titles
6.2 Creativity and Innovation in the Firms

In the course of investigating the barriers facing SMEs working in the creative
industries, there should be a clear understanding of the current state of design and
innovation within firms. This part of the questionnaire aims to build this
understanding through a number of questions that aim to investigate the role of
design inside the company, the willingness to invest in innovation and creativity,
the clients acceptance for innovative ideas, and the importance for creativity and
innovation for the SMEs business in Egypt.
6.2.1 Design role inside firms

Different roles for design inside the firms can be observed as shown in Figure 11.
This role varies from the product development, the taking of strategic decisions,
participation in building the projects plan, the building of the business plan, and
collaboration with the marketing teams. While there is a slightly higher contribution
for design in the product development (53.9% of the participants indicated that
design has a highly important role in the product development, with a weighted
average of 4.31), the weighted average of the other roles varied between 3.7 and

3.6.
Design team collaboration with marketing

team
Design team participation in building the
business plan
Design team participation in building the
projects plan
Design role in taking strategic decisions
Design role in product development
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00
Figure 11. Design role inside firms
These results reflect the narrow understanding of the importance of design inside
the organization. A majority of the participants still see design as a tool used in the
products development, rather than a key factor in building the business success.
This represents a drawback to achieving innovation and business success in the
creative industry, which is highly dependent on design as a business, strategic,
and development tool.
6.2.2 Firms willingness to invest in innovation and creativity

The firms indicated a very high willingness to invest in the innovation process in
terms of allocating budget, team, and time for the innovation process, in addition
to the willingness to change the business strategy to support the innovation as
shown in Figure 12. This may be a result of the nature of the creative firms. A
majority of the employees and even the founders may have a creative background
or education. However, using the cross-tab analysis between this question and the
firms understanding of the role of design within the organization reveals that this
appreciation and willingness to invest in the design and innovation processes may

be halted by the narrow vision regarding their roles.
3.80
3.70
3.60
3.50
3.40
3.30
3.20
3.10
3.00
2.90
2.80
Allocate budget for Invest time in Invest team effort in Willingness to change
innovation innovation and innovation the business strategy
creativity to support innovation
Figure 12. Firms willingness to invest in innovation and creativity
This willingness to invest may only target the role of design in the products
development, neglecting other perspectives of the design contribution in the
organization. For example, firms may welcome investing in the design tools used
in a products development, while believing that the cost and time required for the
design contribution to the business strategy is not viable because of the projects
deadline or insufficient skills among the employees. One of the interviewees stated
that project deadlines, the clients budget, and their teams skills may prevent the
firm from applying a design process in product development.
6.2.3 Clients acceptance of innovation and new ideas

The client plays an essential role in the firms ability to adapt innovation and new
ideas. This is because the client defines the available budget, accepts new ideas,
and approves deliveries. This may either halt or empower the firms from achieving
innovation. As Figure 13 shows, participants have indicated a high level of

acceptance for new ideas and innovation from the clients side. 46.2% of the
participants indicated that clients are highly accepting of new ideas. 32% believe
that clients willingness to increase the budget in order to invest in innovation is
considered very high. 36% of the participants have indicated that the clients
willingness to change the project timelines to adopt innovation is high.
3.90
3.80
3.70
3.60
3.50
3.40
3.30
3.20
3.10
Acceptance of new ideas Willing to increase budget to Willing to accept project time
invest in innovation or for new changes to adopt new ideas
ideas
Figure 13. Clients acceptance of innovation and new ideas
During the interviews, many interviewees indicated two factors that affect the firms
ability to apply new ideas and innovation in a project: the clients acceptance for
new ideas (which depends on the clients trust for the firm, the clients culture, and
education), and the firms ability to convince the client to accept the new ideas.
This latter factor depends on the marketing teams skills and the relationship
between the firm and the client. One of the interviewees indicated that they are
able to apply new ideas with the long-term clients who trust the firms decisions,
while new clients may show reluctance until a rapport is established with the firm.
The implementation of new ideas and innovation can be provided for clients in the
form of additional features or an upgrade for their existing products, as highlighted

by one of the interviewees in the fields of IT and software design.
6.2.4 The importance of creativity and innovation for creative SMEs

Applying creativity and innovation have proven advantageous for the organization.
However, the perception of these benefits may vary from one firm to another.
Therefore, the participants were questioned about how they rate the importance of
creativity and innovation in the Egyptian creative industry based on the profitability,
market competitiveness, market expansion, and added value to the product or
service. The participants have given a very high rate (weighted as 5) to all four
benefits. A higher percentage was given for the fourth factor added value to the
product or service. 64.0% of the respondents identified that creativity and
innovation presents a very high importance to an added value for the product or
service, with a weighted average of 4.2 as shown in Figure 14.
4.20
4.10
4.00
3.90
3.80
3.70
3.60
3.50
Profitability Increase market Expand market Add value to product
competitiveness or service
Figure 14. The importance of creativity and innovation for creative SMEs
In a cross-tab analysis between these results and the results of the question about
the role of design and creativity in the company, the narrow role of design can still
be observed as a tool for designing the product or the service, which reflects on its

market value. While this indirectly lead to achieving other advantages (such as
profitability and improved market competitiveness), adopting design and
innovation as part of a broader strategy inside the organization may lead to more
business success through these four factors highlighted in this question.
6.3 The internal barriers of design and innovation

While the above two parts have been introduced in order to build a clear
understanding of the creative SMEs working in Egypt and the design and
innovation processes within these firms, this subsection investigates the internal
obstacles that prevent firms from achieving true creativity and innovation. The
internal barriers highlighted here are categorized into financial barriers, managerial
barriers, experience-related barriers, marketing-related barriers, infrastructure
related barriers, human resource (HR) barriers, and intellectual property-related
barriers. The questions were designed based on a summated rating scale in order
to measure the different factors related to each barrier.
6.3.1 Internal financial barrier to innovation and creativity

Different internal financial barriers were identified with their negative impact on the
creativity and innovation process inside the organization. The results of this
questionnaire align with the literature studies in this domain. Participants have
varied ratings for the different internal financial barriers, as shown in Figure 15. A
majority of the responses varied from moderate (weighted as 3) and very high
(weighted as 5). Yet, a majority (37.5%) of the respondents rated the managers
tendency for rejection to assign budget for innovation process as very low
(weighted as 1). The weighted average for this factor was 2.6, which is the lowest
compared with the other variables.

Insufficient working capital to support the innovation
process
Liquidity problems inside company
Monitoring spending costs
Fear of financial risk
Poor financial management

Managers reject to assign budget for innovation
process
Insufficient financial management
Limited budget assigned to creativity and innovation
Low project budget
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50
Figure 15. Internal financial barrier to innovation and creativity
The number one state financial reason that negatively affects the firms ability to
achieve innovation and creativity is the low project budget. 52.9% of the
respondents agree that this is considered a very high barrier. A correlation can be
observed between the low project budget and the clients acceptance for
innovation and new ideas. The impact of this factor can increase along with the
clients limited budget or its acceptance of new, innovative ideas. Different
interviewees stated that the financial factors especially the project budget plays
an essential role in the firms ability to achieve innovation.
6.3.2 Internal managerial barriers

Literature studies have highlighted the lack of management skills as one of the
factors that can present a barrier to innovation and creativity inside the
organization. Analyzing the responses regarding the different managerial-related
obstacles that may hinder the creativity and innovation process inside the
organization as shown in Figure 16, varied responses have been received
compared with the aforementioned financial barriers. In the weighted scale from 1

(very low) to 5 (very high), a majority of the responses were located in the moderate
or near-moderate level, with the weight scale averaging 2.9. The lowest value was
assigned to the lack of appreciation for creativity within the managerial body. The
management level in the creative firms is supposed to understand that creativity
and innovation play an essential role in the business. These responses support
the results highlighted earlier regarding the importance of creativity and innovation
for creative SMEs. A majority of the responses indicated that creativity and
innovation are very important for the SMEs.
Fear of unpredictable success
Lack of focus on creativity
Unclear role for designers
Lack of understanding of the role of design and

innovation inside the organization
No (or lack of) allocation for innovation in the project
management
Lack of appreciation of creativity within the
managerial body
Lack of innovation management
Lack of overall management skills
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50
Figure 16. Internal managerial barriers
This understanding has been confirmed by the question here as well as the
interviews conducted with business owners, design leaders, and executives who
have all shown that the managerial level appreciates creativity and innovation
inside the organization, but may lack the skills to manage it properly.
6.3.3 Internal experience-related barriers

Different factors can be linked to the experience that can presents a hindrance to

the design and innovation processes inside of an organization. Those factors
include the design education, understanding the design process, design
management skills, and understanding the designs role in business. The latter
three factors can be linked to a cause-effect relation with the design education, as
proper design education may address the skill set.
Lack of understanding the

design role in business
Lack of design
management skills

design process
Lack of design education
3.10 3.20 3.30 3.40 3.50 3.60 3.70
Figure 17. Internal experience-related barriers
While participants indicated that the design education presents a very high
(weighted as 5) barrier for achieving innovation and creativity (see Figure 17
above), many interviewees have highlighted the design education as one of the
major barriers to creativity and innovation in Egypt, due to the lack of design
schools in Egypt. While there are different universities in Egypt, few schools offer
a design education program. The schools are either expensive, accept too few
students, or are very old and depend on design education materials that lack
integration with the modern understanding of the role of design in business.
Different interviewees indicated that they cant find skillful graphic designers or web
designers to hire, due to the lack of the design skills they have. This not only affects

their ability for creativity and innovation, but also affects their business, as the lack
of design experience has a negative impact on the final product. One of the
interviewees said that skillful designers can help the firm compete in the market,
especially with the other firms who do not have the proper skills in-house.
6.3.4 Internal marketing-related barriers

Marketing is closely related to the design process, and the integration between
both have been highlighted in different studies as an important factor for creating
a successful product. A number of marketing-related factors that may be
considered barriers to the design and innovation processes include the lack of
marketing research, budget allocation, marketing skills, marketing strategy, and
coordination between marketing and design teams (see Figure 18). Participants
have highlighted that the lack of marketing skills stands at the top of the list for
barriers faced by creative SMEs in Egypt, which is also closely linked because of
a cause-effect relation with the other marketing-related factors.
Lack of coordination
between marketing and
Lack of clear marketing

strategy
Lack of marketing skills
Low budget allocated to

marketing research
Lack of marketing research
3.00 3.20 3.40 3.60 3.80 4.00
Figure 18. Internal marketing-related barriers
In a cross-tab analysis with the SMEs capital question, a correlation between the

low budget and the marketing-related barriers can be identified, as these
companies may lack the budget and skills required to build a solid marketing
strategy that is based on an intensive market research operation. As a result of
this lack of marketing skills, the design team becomes unable to understand what
the target consumer needs in order to address the design of the product or service.
6.3.5 Technology and infrastructure-related barriers

Various research projects have highlighted technology as one of the critical factors
that may hinder the innovation process. In creative firms, technology presents an
important asset for the firm in order to achieve innovation. The technological-
infrastructure issues were addressed in order to understand how they may hinder
creativity and innovation inside the company based on four main factors, as seen
in Figure 19 below: a lack of proper technology, poor technological skills, the high
cost of technology, and security issues related to technology. A weighted average
between 3 (moderate) and 4 (high) was assigned to the first three factors. A lower
weighted average (2.89) was assigned to the third factor, which may indicate that
the technological advance in creative firms may be less mature to consider the
security issues related to technology. Additionally, in a cross-tab analysis between
this factor and the number of employees and the firms capital, the lack of
resources may halt the company from adopting security measurements.

4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
Lack of proper Poor technical skills in High cost of technology Security issues related
technology the company to technology
Figure 19. Technology and infrastructure-related barriers
In another cross-tab analysis between the second factor (poor technical skills) and
the experience-related barriers, a relation between the design education and the
technological skills can be identified, as technology skills related to design may be
addressed in design schools that prepare designers to overcome these related
barriers.
6.3.6 Internal Human Resources-related barriers

Human resources-related barriers (wages, employment package and benefits,
health insurance, and social insurance) may stand as a barrier that prevents
designers from focusing on the design and innovation process. While participants
indicated a moderate impact of the wages as a barrier of creativity and innovation,
the overall complement package represents a very high (weighted as 5) barrier
(see Figure 20). The employment package many include the wages, health care,
social insurance, travel, break time, and flexible working hours. In Egypt, formally
registered firms are required to provide health care and social insurance for
employees who work for a contract for more than six months.

4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
Low wages for Poor employment Lack of healthcare Lack of social
employees packages insurance
Figure 20. Internal Human Resources-related barriers
These results can be cross-tabbed with the question about the designers wages,
as participants evaluated the designers wages inside design firms to be moderate.
Therefore, wages have a low-barrier impact on the design and innovation process.
One of the interviewees indicated that designers who work in informal or small
firms may face problems related to wages, because clients may take advantages
of their informal status and try to achieve finical advantages. These may include
working without a contract or negotiating the projects cost, thus affecting the firms
ability to pay the wages of its employees.
6.3.7 Internal Intellectual property-related barriers

Intellectual property and copyright infringements affect the security of the creative
and innovative ideas, presenting a significant barrier to design and innovation.
Participants have valued the lack of intellectual property regulations and copyright
infringements as a very high (weighted as 5) barrier to design and innovation in
Egypt. There currently is no effective regulation that can provide security for the

designers copyrights and creative ideas (see Figure 21).
Lack of intellectual property

48% regulations
52% Copyright infringements
Figure 21. Internal Intellectual property-related barriers
One of the interviewees posited that these barriers can be observed in the
advertising industry, where ideas are plagiarized either from local agencies or from
international advertising campaigns with no effective regulation to secure the
intellectual properties.
6.3.8 Other internal barriers

In addition to the above barriers, internal obstacles were observed that may
negatively affect creativity and innovation in the firm. As shown in Figure 22, 60.0%
of the participants stated that the bad workspace is one of the major barriers that
prevents the design team from focusing on creativity. 3.3% of the participants
highlighted the lack of a collaborative working environment as one of the barriers
that halts the teams ability to achieve innovation.

7%
Bad workspace
33% Lack of collaborative working

environment
60% Bad company location
Figure 22. Other internal barriers
6.4 External Barriers to Design and Innovation

In addition to the internal barriers, external barriers from outside the organization
can negatively affect the design and innovative capabilities of the creative SMEs.
This part of the questionnaire aims to investigate the external obstacles that
creative SMEs face and affect their design and innovation capabilities.
6.4.1 External financial barriers

In addition to the internal financial barrier discussed earlier in this questionnaire,
the financial barriers have external factors that contribute to the hindrance of the
creative and innovative processes within Egyptian SMEs. Different external
financial factors have been highlighted in Figure 23 below in order to understand
how participants rate these values as barriers to the design and innovation process
inside the firm. A majority of the respondents rated these factors as high (weighted
value of 4).

High taxes
Bad banking system
Insufficient client budget
Difficulties procuring bank loans
Limited access to governmental financial assets
Lack of financial support
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50
Figure 23. External financial barriers
As highlighted earlier when discussing the SMEs working capital, a majority of

SMEs are starting the business with a working capital totaling less than USD
10,000. Therefore, external financial support is required to help firms or potential
firms to fund their business. However, firms are faced with external barriers related
to providing financial support. These include the lack of financial support, limited
access to the governments financial assets, difficulties in procuring bank loans,
and bad banking systems. Other facial barriers may include insufficient client
budget and high taxes.
Overall, 50.0% of the companies believe that the lack of financial support presents
a very high (weighted value of 5) barrier for creative SMEs, due to the
complications required to take out loans or access the governments financial-
support programs. The bad banking system and the high interest rates for SMEs
presents another barrier faced by these firms. High taxes are yet another barrier,
as there is no special taxing system that considers the nature of the SMEs and
their limited resources

6.4.2 External marketing-related barriers
Three main external marketing-related factors were valued through the
questionnaire: the high market competency, rejection of innovation, and lack of
personal connections as shown in Figure 24. The first factor was highlighted as
high (weighted value of 4), as SMEs always face high competition from large
enterprises who have higher budgets, more market exposure, and greater market
experience. Those enterprises are more likely to acquire clients compared with the
small SMEs.
3.70
3.65
3.60
3.55
3.50
3.45
3.40
3.35
3.30
3.25
High market competency Rejection of innovation Lack of personal
connections
Figure 24. External marketing-related barriers
The rejection of innovation is considered by a majority of the participants (35.3%)

to be a very high (weighted value of 5) barrier to innovation and creativity. This is
compared with 23.5% of the participants who considered it a high barrier, and
23.5% who considered it a moderate barrier. In a cross-tab analysis between this
barrier and Question 16, which investigated the clients acceptance of new and

innovative ideas, SMEs considered the clients acceptance for new ideas and
innovation one of the factors that supports creativity and innovation inside the firm.
In contrast, the clients rejection for new ideas prevents the firm from achieving
innovation.
6.4.3 External cultural-related barriers

In Egypt, cultural and religious values play an essential role in accepting and
rejecting new ideas. While 38.9% of the questionnaire participants indicated that
the cultural-related factors have moderated (weighted value of 3) in rejecting
innovation and new ideas (see Figure 25), one of the interviewees indicated that
creative and new ideas may have a negative impact on the products success if
they offend the cultural and religious values of the community. She provided an
example of an advertising campaign that was forced to stop by the Egyptian court
for culturally offensive reasons, such as sexual expression.
Rejection of innovative products

42%
Lack of understanding the design

and innovations role in the
58%
community
Figure 25. External cultural-related barriers
The lack of understanding for the role of design and innovation in the community

presents another barrier, as the Egyptian community doesnt have a clear
understanding of what is design and innovation truly are and their role in the
community. As highlighted in Question 19, part of the managerial barriers is the
fear of adopting new ideas due to the high risk and unpredictability of success.
This culture is also shared by clients, as highlighted by one of the interviewees.
Clients highly trust existing, successful ideas, rather than risk it with new,
innovative ideas, especially in the challenging status of the Egyptian economy as
highlighted earlier in this studys literature review.
6.4.4 Other external barriers

In addition to the above barriers, other obstacles may hinder the firms ability to
achieve innovation. These factors are highlighted in Figure 26 below, and include
the traffic and transportation, corruption, and lack of consulting services. One of
the interviewees has stated that the crowded city of Cairo and the busy
transportation system present a significant barrier to creativity and innovation,
because clients tend to choose the firms that are in a similar or near location in
order to save time spent on transportation. This indicates that there are local
barriers that need to be addressed, similar to the common barriers that face the
SMEs in different countries. These local barriers require a deep understanding of
the creative SMEs experience in the Egyptian market and culture.

Lack of consultations resources
Small markets
Corruption
Bad infrastructure
Traffic and transportation
No governmental support
3.40 3.50 3.60 3.70 3.80 3.90 4.00 4.10 4.20
Figure 26. Other external barriers
6.5 Other Questions

The participants were asked other questions about their relation with consumers
in terms of creativity and innovation, as well as their opinion regarding collaboration
with other firms in the same field.
6.5.1 Clients acceptance of new, innovative products

In terms of the clients acceptance for new and innovative products, the
participants rated this factor as moderate (weighted value of 3), as shown in Figure
27. As pointed out by one of the interviewees, this acceptance is based not on the
clients relation to the firm. This is based, however, on the clients culture,
experience, and the previous successful projects that contribute to the building of
trust in the firms decisions.

11%
21%
Low
26% Moderate
High
Very high
42%
Figure 27. Clients acceptance of new, innovative products
6.5.2 Consumer collaboration in the creative process

In different projects, the consumer plays either a positive or a negative role in the
creative process. 36.8% of the participants indicated a moderated contribution for
the consumer in the creative process, while 31,6% of the participants evaluated
this contribution as high (see Figure 28). One of the interviewees said that clients
who contribute in the creative process by giving comments and ideas do so as a
result of their own education and experience.

10% 5%
16%
Very low
Low
Moderate
32%
High
Very high
37%
Figure 28. Consumer collaboration in the creative process
Clients may help the creative process by suggesting new ideas that can lead to
innovative products. On the other hand, a client with a lack of experience and skills
may destroy the innovation process by giving comments that negatively affect the
product or service design. Another interviewee suggested that the clients should
share their experience with the product with the design team in order to improve
the user experience with the final product.
6.5.3 Collaboration with other firms

In addition to the relation between the client and firm, the last question in this
questionnaire aims to investigate the participants opinion about how the
collaboration between companies may support the design and innovation
processes in Egypt. 57.9% of the participant total agreed that this collaboration
may have a positive impact on innovation and creativity in the Egyptian community,
while 31.6% agreed with this statement (see Figure 29).

0%
10%
Totally disagree
Disagree
Neither agree nor disagree

32%
58% Agree
Totally agree
Figure 29. Collaboration with other firms
One of the interviewees discussed the idea of building a design community where
firms can collaborate together in improving creativity and innovation culture in
Egypt. However, further investigations need to be researched in this domain.
7.0 Conclusion and Recommendations

This exploratory research aims to address one main question, which is, What are
the barriers to design and innovation that SMEs face when working in the creative
sector in Egypt? Over the course of answering this question three main
assumptions were highlighted: 1) creative SMEs are playing a role in the Egyptian
economy; 2) these companies are adopting a design and innovation process in
order to achieve innovation; 3) there are barriers faced by these companies that
stand as obstacles to achieving innovation. These assumptions were investigated
based on the hypothesis that improving design and innovation inside the enterprise
will have a positive impact of the enterprises performance.
Over the course of understanding the literature related to the barriers faced by

creative SMEs in Egypt in terms of design and innovation, a secondary research
project was conducted in order to understand the current Egyptian economic
status, the role of the SMEs in the Egyptian economy, the barriers that face SMEs
in Egypt, the benefits of applying innovation in SMEs, and how other countries
adopt design policies in order to help improve the design and innovation
performance, as well as the creative capabilities of the enterprises.
At the end of the study, the assumptions have been positively confirmed by
pointing out that the creative SMEs along with the other SMEs play an essential
role in the Egyptian economy. Also, while these companies indicated that they
have either already adopted a design and innovation process, or that they want to
adopt this process, they are faced with a number of barriers that hinder them from
improving their creative and innovative capabilities.
The barriers to design can be categorized as financial, managerial, experience,

marketing, infrastructure, human resources, and intellectual property. Other local
barriers can be identified, such as those of a cultural and religious nature, or poor
infrastructure.
Addressing these barriers may contribute to the improvement of the creative

SMEs business in terms of profitability, competitiveness, and market value.
However, in order to address these barriers, a number of recommendation is
suggested based on this research. These recommendations can be formed in a
national design policy that may be adopted by the government in order to improve
the creative SMEs contribution to the Egyptian economy. The policy that can be
referred to as the Egyptian Design Policy can be categorized into four sections:
financial and investment policies, design and innovative education polices,
accreditation and quality policies, and awareness and promotional policies.

Financial and investment policies
This first set of recommendations involves overcoming the financial barriers that
face creative SMEs by adopting financial procedures that may support the SMEs
business and its contribution to the national economy. These recommendations
include the following:
The government should provide support for creative SMEs through funding,
bank loans, and encouraging the investment in these industries;
Encourage informal SMEs to register themselves with the authorities by
giving advantages to registered SMEs;
Reduce the regulation and bureaucratic procedures required to establish
SMEs and the receiving of funding and loans;
Provide loans at a low-interest rate for SMEs and encourage building
partnerships with local banks and investors;
Provide financial and legal consultation service for SMEs;
Enable tax subsidies for newly-established SMEs in order to support its
growth in the first years, or until they acquire a solid position in the market.
Design and innovation education polices

The understanding of the roles of design and innovation is marked as one of the
reasons behind different barriers creative SMEs in Egypt face. Therefore, the
design and innovation education programs should play an essential role to prepare
the essential skills required to drive creativity and innovation capabilities of the
organization. Accordingly, the below recommendations can be considered in the
field of design and innovation education:
Encourage the establishment of design schools that can provide the market
with skillful designers;
Improve the existing design curriculum to reflect the extended role of design
in business and economy;
Extend the design education programs to cover related skills required for
the creative field, such as business and management;

Establish training and consultation centers that can provide the existing
designers and firms with the proper education to improve their creativity and
innovative performance;
Include innovation curriculum as part of the design education in order to
prepare designers for creative thinking, and address critical business
challenges.
Accreditation and quality policies

In order to increase the credibility of the firms who improve their creative and
innovation performance, accreditation and quality assurance policies should be
implemented to differentiate creative firms from the other competitors in the
market. The accreditation-related recommendations below can be adopted to
achieve this goal:
Establish an accreditation system where the innovation and creative
capabilities of firms can be evaluated and compensated with certification;
Ensure a quality assurance system that provides consultation and
accreditation for firms who follow a successful design and innovation
process;
Establish consultation centers that can train firms in order to quality for
these accredited certifications;
Encourage consumers to deal with accredited firms.
Awareness and promotional policies

The above recommendations cannot be viable without increasing the awareness
of the roles of design and innovation in business. The benefits that can be gained
by adopting a design and innovation process include increased profitability,
competitiveness, and market value. The recommendations below can contribute
to increasing this awareness:
Promote the broader role of design and innovation in business through
promotional conferences;

Provide coaching events for different firms to increase the awareness of the
roles of design and innovation in business;
Establish awards and competitions that can be awarded to the creative and
innovation products and services;
Encourage firms to adopt design and innovation processes by providing
benefits for the accredited firms, such as tax-reductions or funding priorities;
Increase the number of publications and case studies that highlight
successful stories in the field of innovation and creativity.

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9.0 Appendices
List of the appendices

9.1 Participants list 89
9.2 Questionnaire Form 90
9.3 Questionnaire Data 100
9.4 Interview Form 111
9.5 Interview Sample 116

9.6 Ethic Declination Form 119

9. 1 Participants
An alphabetical list of the companies who participated in the research and agreed
to publish their names:
AlAhram for manufacturing
Design House for Training
Egyptian Tolayn for Advertisements
El Esraa Prepress
Eunoia
Freelance me
Frogcell
Graphus for Design
Hani Saleh Design
infoGlobe
Innovation
Khtwah
Makka for Constructions
Mazeed
MS-Adv
Sketch Group Engineering and Trading
Sozign
Uran

9.2 Questionnaire Form
The questionnaire in this study was presented in both Arabic and English, as the
native language for all the participants is Arabic. Below is the English version of
the survey.
Survey Consent
Participants who complete this survey will be eligible for our Design Capacity
Assessment. We will evaluate the design process in your company or start-up
and provide advice to improving your creativity and innovation, your profitability,
and your competency in the market.
The purpose of this research project is to investigate the barriers to creativity and
innovation facing design in small and medium enterprises (SMEs) in Egypt. This
is a research project being conducted by Rafiq Elmansy at Staffordshire
University in the U.K. You are invited to participate in this research project
because you are part of the design industry in Egypt.
Your participation in this research study is voluntary. You may choose not to
participate. If you decide to participate in this research survey, you may withdraw
at any time. If you decide not to participate in this study, or if you withdraw from
participating at any time, you will not be penalized.
The procedure involves filling out the survey and returning the answered
questions either electronically or in a printed format. Your responses will be
confidential, and we do not collect identifying information such as your name,
email address, or IP address. The survey questions will be about your
experience regarding the barriers that face design SMEs in Egypt.
We will do our best to keep your information confidential. To help protect your
confidentiality, the surveys will not contain information that will personally identify
you. The results of this study will be used for scholarly purposes only and may be
shared with Staffordshire University representatives.
If you have any questions about the research study, please contact Rafiq
Elmansy (rafiqelmansy@aucegypt.edu) or call 00201001778731.
Filling out and submitting this survey indicates the following:

You have read the above information
You voluntarily agree to participate
You are at least 18 years of age
If you do not wish to participate in the research study, please decline

participation, or dont respond to the survey questions.

Question 1: Please select your choice:
Agree
Disagree
Clicking on the button above indicates that you have read the above information,
and you voluntarily agree to participate. If you do not wish to participate in the
research study, please decline participation by clicking on the Disagree button, or
dont respond to the survey questions.
Survey
Personal Information
Question2: Provide contact information
Full name
Email
Phone number
Part 1: Company Information
Question 3: What is your companys name?
Question 4: How long has your company been established?
Less than 2 years

2-5 years
5-10 years
More than 10 years
Question 5: Where is your company based?
Cairo
Outside Cairo (please specify)
Other country (please specify)

Question 6: If the company headquarter is outside Egypt, please specify:
Question 7: What are your target markets?
Egypt (domestic)
Middle East
North Africa
Africa
Europe
North America
South America
Asia
Oceanic
Question 8: What is the companys business niche?
Design agency
IT and software
Web design, mobile applications
Architecture and interior design
Fashion design
Service design
Social innovation
Product design
Visual arts and craft
Media and TV

Question 9: What is the companys estimated number of employees?
Less than 10
10 and 99
100 and 250
More than 250
Question 10: What is the estimated working capital of the company?

Less than $10,000
$10,000 - $100,000
$100,001 - $500,000
More than $500,000
Question 11: What are the current creativity and innovation levels in your
company?
Creativity Very
Very low Low Moderate High
high
Innovation Very
Very low Low Moderate High
high
Question 12: How do you rate the wages of the design and creative team
in the company?
Very low Low Moderate High Very high
Question 13: What are the design roles in the company?
Junior designers
Senior designer
Team leader
Art director
Creative director
Design manager

Design consultant
Innovation manager
Part 2: Creativity and Innovation in the Company
Question 14: Rate the importance of design and creativity levels in your
company (with 1 indicating unimportant and 5 indicating very important)
1 2 3 4 5
Design role in product development
Design role in taking strategic
decisions
Design team participation in building
the projects plan
Design team participation in building
the business plan
Design team collaboration with
marketing team
Question 15: Rate your companys willingness to invest in innovation and

creativity (with 1 indicating low willingness and 5 indicating high willingness)
1 2 3 4 5
Allocate budget for innovation
Invest time in innovation and
creativity
Invest team effort in innovation
Willing to change the business
strategy to support innovation
Question 16: Rate your clients acceptance for innovation and new ideas (with 1
indicating unacceptable and 5 indicating very acceptable)
1 2 3 4 5
Acceptance to new ideas
Willing to increase budget to invest in
innovation or for new ideas

Willing to accept project time changes
to adopt new ideas
Question 17: Rate the importance of creativity and innovation for SMEs working
in the creative sector in Egypt based on the following factors (with 1 indicating
unimportant and 5 indicating very important)
1 2 3 4 5
Profitability
Increase market competency
Expand market
Add value to product or service
Part 3: Internal Barriers of Design and Innovation
Question 18: Rate how the internal financial barriers affect your company to
achieve innovation and creativity (with 1 indicating low impact or unimportant
and 5 indicating high impact)
1 2 3 4 5
Low project budget
Limited budget assigned to creativity
and innovation
Insufficient financial management
Managers refuse to assign budget for
innovation process
Poor financial management
Fear of financial risk
Monitoring spending costs
Liquidity problems
Insufficient working capital
Question 19: Rate how the internal managerial obstacles negatively affect your
company from achieving innovation and creativity (with 1 indicating low impact
or unimportant and 5 indicating high impact)
1 2 3 4 5
Lack of overall management skills

Lack of innovation management
Lack of appreciating creativity within
the managerial body
No (or lack of) allocation for
innovation in the project management
Lack of understanding of the role of
design and innovation inside the
organization
Unclear role for designers
Lack of focus on creativity
Fear of unpredictable success
Question 20: Rate how the internal experience-related obstacles negatively

affects your company from achieving innovation and creativity (with 1
indicating low impact or unimportant and 5 indicating high impact)
1 2 3 4 5
Lack of design education
Lack of understanding of the design
process
Lack of design management skills
Lack of understanding of the design
role in business
Question 21: Rate the internal marketing-related obstacles that prevent your
company from competing in the market through creativity and innovation (with
1 indicating low impact or unimportant and 5 indicating high impact)
1 2 3 4 5
Low budget allocated to marketing
research
Lack of marketing skills
Lack of clear marketing strategy
Question 22: Rate the internal infrastructure-related obstacles that prevent your
company from innovating (with 1 indicating low impact or unimportant and 5
indicating high impact)
1 2 3 4 5

Lack of proper technology
Poor technical skills in the company
High cost of technology
Security issues related to technology
Question 23: Rate the internal human resources-related obstacles that prevent
your company from innovating (with 1 indicating low impact or unimportant and
5 indicating high impact)
1 2 3 4 5
Low wage for employees
Poor employment packages
Lack of health care
Lack of social insurance
Question 24: Rate the internal intellectual property-related obstacles that

prevent your company from innovating (with 1 indicating low impact or
unimportant and 5 indicating high impact)
1 2 3 4 5
Lack of intellectual property
regulations
Copyright infringements
Question 25: What are the other internal barriers that negatively affect
your teams ability to innovate?
Bad workspace
Lack of collaborative working environment
Bad company location
Other, please specify

Part 4: External Barriers of Design and Innovation
Question 26: Rate how the external financial-related obstacles prevent your
1 2 3 4 5
Lack of financial support
Limited access to governmental
financial assets
Difficulties procuring bank loans
Insufficient client budget
Bad banking system
High taxes
Question 27: Rate how the external market-related obstacles prevent your
1 2 3 4 5
High market competency
Rejecting new innovation
Lack of personal connections
Question 28: Rate how the external cultural-related obstacles prevent your
1 2 3 4 5
Rejecting now innovative products
Lack of understanding the role of
design and innovation in the
community.
Question 29: What are the other external barriers that negatively affect
your teams ability to innovate?
No government support
Traffic and transportation
Bad infrastructure

Corruption
Small markets
Lack of consultations resources
Other, please specify
Part 5: Other questions
Question 30: How do you expect consumers to accept new innovative

products?
Question 31: How do consumers collaborate in the creative process?
Question 32: Do you think that collaboration with other companies can
help improve the innovation culture in the local community?
Totally
Disagree Moderate High Very high
disagree
End of survey.
Thank you for taking the time to fill out this survey!

9. 3 Questionnaire data
Below is the quantitative data collected based on the questionnaire provided for
the participants through Survey Monkey web-based platform. Only quantitative
answered data is represented in the tables below.
Q4:
How long has your company been established?
Response Response
Answer Options
Percent Count
Less than 2 years 28.6% 8
2-5 years 42.9% 12
5-10 years 3.6% 1
More than 10 years 25.0% 7
answered question 28
skipped question 0
Q5:
Where is your company based?
Response Response
Answer Options
Percent Count
Cairo 57.1% 16
Outside Cairo (please specify) 42.9% 12
skipped question 0
Q7:
What is/are your target market(s)?
Response Response
Answer Options
Percent Count
Egypt (domestic) 96.4% 27
Middle East 42.9% 12
North Africa 7.1% 2
Africa 3.6% 1
Europe 3.6% 1
North America 3.6% 1
South America 0.0% 0
Asia 3.6% 1
Oceanic 0.0% 0
Other (please specify) 0.0% 0

skipped question 0
Q8:
What is the companys business niche?
Response Response
Answer Options
Percent Count
Design agency 48.1% 13
IT and software 14.8% 4
Web design, mobile applications 22.2% 6
Architecture and interior design 7.4% 2
Fashion design 3.7% 1
Service design 11.1% 3
Social innovation 7.4% 2
Product design 22.2% 6
Visual arts and crafts 11.1% 3
Media and TV 0.0% 0
skipped question 1
Q9:
What is the companys estimated number of employees?
Response Response
Answer Options
Percent Count
Less than 10 63.0% 17
10 and 99 29.6% 8
100 and 250 3.7% 1
More than 250 0.0% 0
I don't know 3.7% 1
skipped question 1
Q10:
What is the estimated working capital of the company?
Response Response
Answer Options
Percent Count

Less than $10,000 53.8% 14
$10,000 - $100,000 15.4% 4
$100,001 - $500,000 3.8% 1
More than $500,000 0.0% 0
I don't know 23.1% 6
skipped question 2
Q11:
How do you estimate the creativity and innovation levels in your company?
Answer Very Very Rating Response

Low Moderated High
Options low high Average Count
Creativity 0 1 15 10 2 3.46 28
Innovation 0 3 12 10 2 3.41 27
skipped question 0
Q12:
How do you rate the wages of the design and creative team in the company compared with the
other titles?
Response Response
Answer Options
Percent Count
Very low 0.0% 0
Low 3.8% 1
Moderate 69.2% 18
High 26.9% 7
Very high 0.0% 0
skipped question 2
Q13:
What are the design titles in the company?
Response Response
Answer Options
Percent Count
Junior designers 53.8% 14
Senior designer 38.5% 10
Team leader 19.2% 5
Art director 23.1% 6

Creative director 11.5% 3
Design manager 11.5% 3
Design consultant 7.7% 2
Innovation manager 3.8% 1
skipped question 2
Q14:
Rate the importance of design and creativity in your company (with 1 indicating unimportant and
5 indicating very important)
Rating Response
Answer Options 1 2 3 4 5 N/A
Average Count
Design role in product
0 1 4 7 14 0 4.31 26
development
Design role in taking strategic 0 2 10 7 7 0 3.73 26
decisions
Design team participation in 0 3 9 6 6 1 3.63 25
building the projects plan
Design team participation in 1 3 12 5 3 1 3.25 25

building the business plan
Design team collaboration 1 3 6 11 4 0 3.56 25
with marketing team
skipped question 2
Q15:
Rate your companys willingness to invest in innovation and creativity (with 1 indicating unwilling
and 5 indicating highly willing)
Rating Response
Average Count
Allocate budget for
1 3 8 6 9 0 3.70 27
innovation
Invest time in innovation
1 4 9 4 9 0 3.59 27
and creativity
Invest team effort in
6 3 5 5 7 0 3.15 26
innovation
Willingness to change
the business strategy to 4 1 8 3 9 1 3.48 26
support innovation
skipped question 1

Q16:
Rate your clients acceptance level for innovation and new ideas (with 1 indicating unaccepted
and 5 indicating very accepted)
Rating Response
Average Count
Acceptance of new 3 3 2 6 12 0 3.81 26
ideas
Willing to increase
budget to invest in
3 3 7 3 8 1 3.42 25
innovation or for new
ideas
Willing to accept project
time changes to adopt 1 7 3 9 5 0 3.40 25
new ideas
skipped question 2
Q17:
Rate the importance of creativity and innovation for SMEs working in the creative sector in Egypt
based on the following factors (with 1 indicating unimportant and 5 indicating very important)
Rating Response
Average Count
Profitability 2 3 3 8 9 0 3.76 25
Increase market
2 2 4 4 13 0 3.96 25
competitiveness
Expand market 1 1 5 6 12 0 4.08 25
Add value to product 1 3 3 2 16 0 4.16 25

or service
skipped question 3
Q18:
Rate how the following internal financial barriers affect your companys ability to achieve
innovation and creativity (with 1 indicating a low impact and 5 indicating a high impact)
Rating Response
Answer Options 1 2 3 4 5
Average Count
Low project budget 2 1 3 2 9 3.88 17

Limited budget
assigned to creativity 2 2 4 4 4 3.38 16
and innovation

Insufficient financial
4 2 3 4 3 3.00 16
management
Managers refuse to
assign budget for 6 2 3 3 2 2.56 16
innovation process
Poor financial
4 3 2 6 1 2.81 16
management
Fear of financial risk 3 1 6 0 6 3.31 16
Monitoring spending
3 2 8 1 2 2.81 16
costs
Liquidity problems
1 0 8 2 6 3.71 17
inside company
Insufficient working
capital to support the 2 3 5 1 6 3.35 17
innovation process
skipped question 11
Q19:
Rate how the following internal managerial obstacles negatively affect your companys ability to
achieve innovation and creativity (with 1 indicating a low impact and 5 indicating a high impact)
Rating Response
Average Count
Lack of overall management
4 3 5 2 4 2.94 18
skills
Lack of innovation
2 4 5 2 4 3.12 17
management
Lack of appreciation of
creativity within the 3 0 0 1 0 1.75 4
managerial body
No (or lack of) allocation for
innovation in the project 3 2 3 2 5 3.27 15
management
Lack of understanding of the
role of design and innovation 5 3 1 3 4 2.88 16
inside the organization
Unclear role for designers 8 1 1 3 4 2.65 17
Lack of focus on creativity 1 0 0 1 1 3.33 3
Fear of unpredictable success 6 1 3 2 5 2.94 17

skipped question 10
Q20:

Rate how the internal experience-related obstacles negatively affects your company from
achieving innovation and creativity (with 1 low impact unimportant and 5 indicating high impact)
Rating Response
Average Count
Lack of design education 3 1 4 2 8 3.61 18

3 2 4 0 9 3.56 18
design process
Lack of design
5 2 1 1 8 3.29 17
management skills

2 3 4 3 5 3.35 17
design role in business
skipped question 10
Q21:
Rate how the following internal marketing-related obstacles prevent your company from
competing in the market through creativity and innovation (with 1 indicating a low impact and 5
indicating a high impact)
Rating Response
Average Count
Lack of marketing research 2 2 5 2 7 3.56 18

Low budget allocated to
3 1 2 5 7 3.67 18
marketing research
Lack of marketing skills 2 0 3 5 8 3.94 18
Lack of clear marketing
3 2 2 5 6 3.50 18
strategy
Lack of coordination between
3 0 8 0 6 3.35 17
marketing and design teams
skipped question 10

Q22:
Rate how the following internal infrastructure-related obstacles prevent your company from
innovating (with 1 indicating a low impact and 5 indicating a high impact)
Rating Response
Average Count
Lack of proper technology 3 0 6 3 6 3.50 18
Poor technical skills in the

4 1 6 0 7 3.28 18
company
High cost of technology 3 3 3 3 5 3.24 17
Security issues related to

5 2 5 2 4 2.89 18
technology
skipped question 10
Q23:
Rate how the following internal human resources-related obstacles prevent your company from
innovating (with 1 indicating a low impact and 5 indicating a high impact)
Rating Response
Average Count
Low wages for employees 2 2 5 4 4 3.35 17
Poor employment packages 2 1 4 4 6 3.65 17
Lack of healthcare 4 4 2 3 3 2.81 16
Lack of social insurance 4 2 2 4 3 3.00 15
skipped question 11
Q24:
Rate how the internal intellectual property-related obstacles prevent your company from
innovating (with 1 low impact unimportant and 5 indicating high impact)
Rating Response
Average Count
Lack of intellectual
3 0 2 1 9 3.87 15
property regulations
Copyright infringements 3 1 2 2 7 3.60 15

skipped question 13
Q25:

What are the other internal barriers that negatively affect your teams ability to innovate?
Response Response
Answer Options
Percent Count
Bad workspace 60.0% 9
Lack of collaborative working environment 33.3% 5
Bad company location 6.7% 1
Other (please specify) 2
skipped question 13
Q26:
Rate how the following external finance-related obstacles prevent your company from innovating
(with 1 indicating a low impact and 5 indicating a high impact)
Rating Response
Average Count
Lack of financial support 3 0 3 2 9 1 3.82 18
Limited access to
governmental financial 2 2 1 4 8 1 3.82 18
assets
Difficulties procuring
3 2 2 1 7 3 3.47 18
bank loans
Insufficient client budget 2 1 4 5 6 0 3.67 18
Bad banking system 6 1 5 2 3 0 2.71 17
High taxes 3 1 4 3 7 0 3.56 18
skipped question 10
Q27:
Rate how the following external market-related obstacles prevent your company from innovating
Rating Response
Average Count
High market
3 1 3 6 5 0 3.50 18
competency
Rejection of innovation 2 1 4 4 6 0 3.65 17

Lack of personal
1 1 7 3 3 2 3.40 17
connections
skipped question 10
Q28:

Rate how the following external cultural-related obstacles prevent your company from innovating
Rating Response
Average Count
Rejection of innovative
4 2 7 1 4 0 2.94 18
products
Lack of understanding
the design and
2 0 3 2 11 0 4.11 18
innovations role in the
community
skipped question 10
Q29:
What are the other external barriers that negatively affect your teams ability to innovate?
Rating Response
Average Count
No governmental support 1 0 0 0 2 2 3.67 5
Traffic and transportation 1 1 3 4 8 2 4.00 19
Bad infrastructure 0 1 3 5 7 3 4.13 19
Corruption 2 1 3 0 9 3 3.87 18
Small markets 1 0 5 4 5 2 3.80 17
Lack of consultations
2 0 4 3 7 2 3.81 18
resources
skipped question 9
Q30:
How highly do you expect consumers to accept new, innovative products?
Response Response
Answer Options
Percent Count
Very low 0.0% 0
Low 21.1% 4
Moderate 42.1% 8
High 26.3% 5
Very high 10.5% 2
skipped question 9
Q31:

How highly do consumers collaborate in the creative process?
Response Response
Answer Options
Percent Count
Very low 5.3% 1
Low 15.8% 3
Moderate 36.8% 7
High 31.6% 6
Very high 10.5% 2
skipped question 9
Q32:
Do you agree that collaboration with other companies can help improve the innovation culture in
the local community?
Response Response
Answer Options
Percent Count
Totally disagree 0.0% 0
Disagree 0.0% 0
Neither agree nor disagree 10.5% 2
Agree 31.6% 6
Totally agree 57.9% 11
skipped question 9

9.4 Interview Form
The form below presents a guide for the interview session and questions. The
interview timeline works as follows:
Start the online meeting with the interviewee

Provide introduction to the research project and the aim of the study
Consent includes getting the interviewees approval to start the interview
Get the interviewees approval to audio-record the interview
Ask the interviewee if his or her information is preferred to be anonymous
Start the interview based on the questions highlighted in the interview form
below without restricting the order or the number of answered questions
After finalizing the interview, the audio-recording is turned off
Interview ends
Survey Consent
The purpose of this research project is to investigate the barriers to creativity and
innovation facing design in small and medium enterprises (SMEs) in Egypt. This
is a research project being conducted by Rafiq Elmansy at Staffordshire
University in the U.K. You are invited to participate in this research project
because you are part of the design industry in Egypt.
Your participation in this research study is voluntary. You may choose not to
participate. If you decide to participate in this research interview, you may
withdraw at any time. If you decide not to participate in this study, or if you
withdraw from participating at any time, you will not be penalized.
The procedure involves answering the interview questions. These answers will
be recorded during the time of the interview, which may be delivered through a
face-to-face meeting, phone, email or online chatting applications. Your
responses will be confidential, and we do not collect identifying information such
as your name, email address, or IP address. The interview questions will be
about you experience regarding the barriers that face design SMEs in Egypt.

We will do our best to keep your information confidential. To help protect your
confidentiality, the surveys will not contain information that will personally identify
you. The results of this study will be used for scholarly purposes only and may be
shared with Staffordshire University representatives.
If you have any questions about the research study, please contact Rafiq
Elmansy (rafiqelmansy@aucegypt.edu) or call 00201001778731.
Accepting this interview indicates the following:

You have read the above information
You voluntarily agree to participate
You are at least 18 years of age
If you do not wish to participate in the research study, please decline participating
in the interview or answering the questions.
Please sign below your choice:
Agree
Disagree
Signature (printed or electronic)
Date
Clicking on the button above and signing this consent form indicates that you
have read the above information, and you voluntarily agree to participate. If you
do not wish to participate in the research study, please decline participation by
clicking on the Disagree button, or dont respond to the questions.

Interview questions
Part 1: Company Information

Question 1: What is your companys name?
Question 2: How long has your company been established?
Question 3: Where is your company based?
Question 4: What are your target markets?
Question 5: What is the companys business niche?
Question 6: What is the companys estimated number of employees?
Question 7: What is the estimated working capital of the company?
Question 8: How can you describe the creativity and innovation in your
company?
Question 9: How do you describe the employment and financial status of the
creative team in the company?
Part 2: Creativity and Innovation in the Company

Question 10: Describe the role of design and creativity in the organization
structure. What are the current design or creative titles in the company?
Question 11: How do you describe your company willingness to invest in design
and innovation? And why?
Question 12: Will your clients accept new idea and innovative products? And
why?
Question 13: Do you think innovation and creativity are important for your
business? If so, please highlight why you think it is important?
Part 3: Internal Barriers of Design and Innovation

Question 14: What are the internal barriers that prevent your company from
achieving creativity and innovation?

Question 15: How do you think these barriers affect the innovation process?
Question 16: Did your company take further actions to overcome these barriers?
If so, please specify.
Part 2: External Barriers of Design and Innovation

Question 17: What are the external barriers that prevent your company from
achieving creativity and innovation?
Question 18: How do you think these barriers affect the innovation process?
Question 19: Did your company take further actions to overcome these barriers?
If so, please specify.
Question 20: How do you think the government may help to overcome these
external barriers?
Question 21: How do you think the industry councils, syndicates, and the
companies working in the same field may help to overcome these external
barriers?
Part 3: Other questions

Question 22: How do you expect consumers to accept new innovative products?
Question 23: How do consumers collaborate in the creative process?
Question 24: Do you think that collaboration with other companies can help
improving the creative and innovation culture inside companies?
End of the interview.

Thank you for taking the time to answer these questions. Your responses are
appreciated!

9.5 Interview transcript sample
Part of the study included interviews with design SMEs in Egypt. The transcript
below is an excerpt of one of the interviews that was conducted with a founder of
a medium-sized enterprise working in the IT and Software/web design and
mobile applications. The name of the company and the contact information were
removed from the transcript below.
This interview was conducted on Tuesday 28 June, 2016 at 2:47 pm Cairo time.
The interview duration is 1:31 hours. This interview was conducted in Arabic with
usage of some English terms. However, the questions below were translated into
English by the researcher. The questions are highlighted in bold, while the
answers are presented in normal font.
Q: Thank you for agreeing this to participate in this study. This interview is
now being recorded. The first question is, how long has the firm been
established?
A: The firm was established 14 years ago. Since 2002.
Q: Where is the main branch of the company? And do you have any other
branches?
A: The main branch is in Cairo, and we partner with joint ventures in Kuwait.
Q: What is the target market of the firm?

A: The governmental sector and medium-sized companies.
Q: What are the business niche and type of products you have?
A: We design and develop software products. Also, we provide Software as a
Service (SaaS) for companies such as software development and website
design. Also, we provide printed graphic design for our consumers.
Q: What is the number of employees?

A: 22 employees.
Q: What is the working capital in the company?

A: This is not very clear in Egypt, but the estimated working capital is L.E.
1,000,000 (USD 112,655.8).
Q: How do you see the financial situation for the company due to the recent
challenges in Egypt? And how do you see your company from the creative
side?
A: Based on the financial situation, the firm is achieving yearly profits despite the
recent circumstances in Egypt. The problem is with finical liquidity, as the turn-
over takes time to be paid for the company.

In terms of creativity, we believe that we must be more creative in order to add-
value for our products. While many companies provide web design and software
design, we aim to use creativity to add value for our products. Initially, I was a
designer. So, in the company, we believe that designers should have a wider role
as they are always thinking outside the box and are aware of different factors
such as the user experience, creative trends, and communicate with the human-
factors in the design. The design team contributes in giving directions based on
their understanding the consumer. In terms of innovation, SMEs need to adopt
innovation in order to compete with the larger companies in the market.
Q: Does your client have the willingness to accept innovative products?

A: I studied this domain and we found that 78% of our clients (individuals and
companies) welcome innovation and added features. We usually present
innovative features for our old clients as they welcome in testing and pilot
products that introduce innovation.
Q: What is the added-value of adopting innovation and creativity inside the

organization?
A: Innovation adds a marketing value as salesmen are able to market the
products based on these new features.
Q: Do you think innovation can lead to profitability and improve

competitiveness?
A: Yes, sure. However, the Egyptian market still prefers to depend on the regular
products rather than innovative products.
Q: What are the internal barriers of design and innovation inside the
organization?
A: Sometimes creative ideas are good but not deeply analyzed, therefore it
becomes irrelative to the business target. These ideas may not have a high
impact on the user. Some ideas require cost and assets without any forecast of
the expected revenues.
In terms of the design process, existing designers already have the vision about
the business. However, fresh graduates dont have the business background
required to do the design work. Most of the fresh graduates believe that design is
only art. We try to teach new designers that design is in the center of the process
and needs to be integrated with other teams such as the marketing team,
business team...etc.
There is also a lack of understanding of the role of design in the business. There
is an under-estimation for the designer as they believe that designers only used
to create the layout and the aesthetic part of the project. Developers and

business managers believe that designers are an extra load on the project. They
believe that design is only an interface design. Therefore, we try to orient the new
employees to the design role in the business.
Another problem is knowledge and education, as potential employees may not

accept flexible learning such as the online courses, which negatively affect their
experience when working inside the firm.
Q: How can we solve these internal barriers?

A: We provide sessions for the employees to help them to appreciate innovation
and creative ideas. New ideas are discussed and criticized in order to build an
innovate culture inside the organization.
Q: What are the external barriers of design and innovation in your

company?
A: One of the most important obstacles is that the client provide tight deadline as
the client cant understand the real timeframe of the project. Also, clients dont
want to pay extra budget for the innovation as they seek short-term profits. This
problem was obvious during the financial crisis. Companies couldnt reduce
some assets such as the wages and existing project. So, they reduced the
budget allocated for innovation and new ideas.
Another problem is the slow Internet connection. In the software industry, we

cant test the performance of applications due to the slow connection. Also,
transportation presents one of the major problems that face Egyptian companies.
Q: Do the banking system or the bureaucratic process present barriers for

your firm?
A: Not really.
Q: How do these barriers affect the innovation process?

A: These problems hinder the innovation as the client doesnt accept any delays
in the project in order to achieve innovation or testing new ideas.
In some cases, we try to focus the innovation for the client. We ask the client to
accept a beta version and then we provide a final version with innovative
features. However, this solution adds cost and effort on the company.
Q: Can you see that collaboration between companies may help to improve
the innovation ecosystem in Egypt?
A: Maybe. The big problem there is with technical intelligence and skill hunting.
Companies steal the ideas and do reverse engineering and present it to the
market. The legal regulation is not efficient to prevent these crimes.
We are done with the questions and the recording will stop now. Thank you for

your and contribution.
9.5 Ethic Declination Form
RESEARCH ETHICS
Proportionate Review Form

The Proportionate Review process may be used where the proposed research raises only
minimal ethical risk. This research must: focus on minimally sensitive topics; entail minimal
intrusion or disruption to others; and involve participants who would not be considered
vulnerable in the context of the research.

PART A: TO BE COMPLETED BY RESEARCHER
Name of Researcher: Rafiq Elmansy
Student/Course Details (If Applicable)
Student ID Number: E028479c
Name of Supervisor(s)/Module Tutor: Carol Meachem
PhD/MPhil project:
Taught Postgraduate
Award MA Design Management
Project/Assignment: Title:
Masters Project in Design Management -
Undergraduate
Module Module Code: COST70237
Project/Assignment: Title:

Project Title: What are the Barriers to Design and Innovation that Face SMEs
Working in the Creative Sector in Egypt?
Project Outline: This research is planned to investigate the barriers that face design
SMEs working in the creative sector that negatively affect their
ability to innovate and compete in the market by investigating the
answers to the following questions:
1)How do design SMEs working in the creative sector contribute to
the Egyptian economy?
2)What are the barriers that face design SMEs, affecting their
ability to innovate and compete in the market?
3) How have design policies applied in other countries such as the
UK contributed overcoming similar barriers?
4)What policies that can be adopted in Egypt to support creativity
and innovation in companies working in the creative sector?

The findings of this research should highlight the barriers to

creativity and innovation and build a suggested strategy that can
be adopted by companies and the country to help companies to
overcome these barriers.
Give a brief description Two types of primary research methods will be adopted in this
of participants and research: survey and interviews. Quantitative data will be
procedure (methods, collected through surveys that will be distributed using online web
tests etc.) links, emails, and printed material for the companies working in
the creative sector to collect data about the barriers that face
their design process and prevent these companies from innovating
and competing in the market. Qualitative data will be collected
through interviews with design practitioners, consultants, and
academic bodies to support the qualitative data and build an
understanding of the obstacles that face creative SMEs in Egypt.

Expected Start Date: 1st Febreury Expected End 12nd August
Date:

Relevant professional body ethical guidelines should be consulted when completing this form.
Please seek guidance from the Chair of your Faculty Research Ethics Committee if you are
uncertain about any ethical issues arising from this application.
There is an obligation on the researcher and supervisor (where applicable) to bring to the
attention of the Faculty Ethics Committee any issues with ethical implications not identified by
this form.

Researcher Declaration
I consider that this project has no significant ethical implications requiring full

ethical review by the Faculty Research Ethics Committee.

I confirm that:
1. The research will NOT involve members of vulnerable groups.
Vulnerable groups include but are not limited to: children and young
people (under 18 years of age), those with a learning disability or
cognitive impairment, patients, people in custody, people engaged
in illegal activities (e.g. drug taking), or individuals in a dependent or
unequal relationship.
2. The research will NOT involve sensitive topics.
Sensitive topics include, but are not limited to: participants sexual
behavior, their illegal or political behavior, their experience of
violence, their abuse or exploitation, their mental health, their
gender or ethnic status. The research must not involve groups
where permission of a gatekeeper is normally required for initial

access to members, for example, ethnic or cultural groups, native
peoples or indigenous communities.
3. The research will NOT deliberately mislead participants in any way.
4. The research will NOT involve access to records of personal or
confidential information, including genetic or other biological
information, concerning identifiable individuals.
5. The research will NOT induce psychological stress, anxiety or
humiliation, cause more than minimal pain, or involve intrusive
interventions.
This includes, but is not limited to: the administration of drugs or
other substances, vigorous physical exercise, or techniques such as
hypnotherapy which may cause participants to reveal information
which could cause concern, in the course of their everyday life.
6. The research WILL be conducted with participants full and informed
consent at the time the study is carried out:

The main procedure will be explained to participants in
N/A
advance, so that they are informed about what to expect.
Participants will be told their involvement in the research is

voluntary.
Written consent will be obtained from participants. (This is not

required for self-completion questionnaires as submission of the

completed questionnaire implies consent to participate).
Participants will be informed about how they may withdraw
from the research at any time and for any reason.
For questionnaires and interviews: Participants will be given
the option of omitting questions they do not want to answer.
Participants will be told that their data will be treated with full
confidentiality and that, if published, every effort will be made
to ensure it will not be identifiable as theirs.

Participants will be given the opportunity to be debriefed i.e. to
find out more about the study and its results.
If you are unable to confirm any of the above statements, please complete a Full Ethical Review
Form. If the research will include participants that are patients, please complete the
Independent Peer Review process.
Supporting Documentation
All key documents e.g. consent form, information sheet, questionnaire/interview
schedule are appended to this application.


Signature of
Date: 16th March 2016
Researcher:

NB: If the research departs from the protocol which provides the basis for this proportionate
review, then further review will be required and the applicant and supervisor(s) should consider
whether or not the proportionate review remains appropriate. If it is no longer appropriate a full
ethical review form MUST be submitted for consideration by the Faculty Research Ethics
Committee.
STUDENT RESEACHER: NEXT STEP

COMPLETE AND SAVE THIS FORM IN THE FOLLOWING FORMAT FOR THE FILE NAME
FAMILY NAME FIRST NAME, STUDENT, DISCLAIMER E.G. WHIZZ BILLY STUDENT
DISCLAIMER

E-MAIL IT AS A WORD ATTACHMENT, ALONG WITH ANY RELEVANT SUPPORTING DOCUMENTS,
USING THE FILE NAME AS THE SUBJECT [IN THE SUBJECT BAR OF THE E-MAIL] TO YOUR
SUPERVISOR.

*THERE IS NO NEED TO PRINT THIS FORM*
STAFF RESEACHER: NEXT STEP

PLEASE FORWARD THIS FORM TO FACULTY RESEARCH ETHICS COMMITTEE [ethics-
FACT@staffs.ac.uk] WHO WILL ARRANGE FOR IT TO BE CONSIDERED BY AN INDEPENDENT MEMBER
OF THE FACULTY RESEARCH ETHICS COMMITTEE


PART B: TO BE COMPLETED BY SUPERVISOR/MODULE TUTOR (If Applicable)
I consider that this project has no significant ethical implications requiring full
ethical review by the Faculty Research Ethics Committee.

I have checked and approved the key documents required for this proposal (e.g.
consent form, information sheet, questionnaire, interview schedule).

Signature of Supervisor: Date:

SUPERVISOR: NEXT STEP

READ AND CHECK WHEN RECEIVED FROM THE STUDENT; IF SATISFIED ADD YOUR NAME
AND DATE WHERE INDICATED
SAVE AND SEND AS A WORD ATTACHMENT BY E-MAIL, USING THE FILE NAME AS THE
SUBJECT [IN THE SUBJECT BAR OF THE E-MAIL] TO ethics-FACT@staffs.ac.uk



PART C: TO BE COMPLETED BY FACULTY RESEARCH ETHICS COMMITTEE MEMBER
This research proposal has been considered using agreed University Procedures
and is now approved.
Or
This research proposal has not been approved due to the reasons given below.

Name of Reviewer:
Date:
Signature:


Elmansy E028479c What Are The Barriers To Design and Innovation That Face SMEs Working in The Creative Sector in Egypt

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Elmansy E028479c What Are The Barriers To Design and Innovation That Face SMEs Working in The Creative Sector in Egypt

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FACULTY OF ARTS and CREATIVE TECHNOLOGIES

Masters Project in Design

Module Code: COST70237 60 Credits

Module Tutor: Carol Meachem

Email Address: Carol.Meachem@staffs.ac.uk

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Although this is a significant contribution to the Egyptian economy, manufacturing

In recent years, start-ups and entrepreneurship programs have been established

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2.1 Aims and Objectives

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2.3 Significance of the Research

Understanding the barriers to innovation can contribute to addressing these

2.4 Definition of Terms

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2.4.1 Small and Medium Enterprises (SMEs)

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The classification of SMEs in Egypt was introduced by the Egyptian Ministry of

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2.4.2 Creative Sector

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This later definition of design will be adopted during this study.

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3.0 Scope and Limitations

3.1 Creativity and Innovation

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3.2 Creative Sector

3.3 Small and Medium Enterprises (SMEs)

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4.0 Research Methodology

4.1 Literature Review

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4.2 Quantitative Research

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4.2.1 Questionnaire Design

Factual questions were added to the questionnaire in a form of multiple choice

The questionnaire is designed and made available through Surveymonkey.com,

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Additionally, a paid campaign has been created on Facebook to reach the

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4.3.1 The Interviewees

4.3.2 Interview Design

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5.1 The Struggling Economy in Egypt

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In particular, the UK government is giving attention to this and aims to encourage

5.3 SMEs in Egypt

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Egypt Cairo Non-Cairo Giza

5.4 Barriers Faced by SMEs in Egypt

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5.4.1 Financial Barriers