The fallacy at the heart of your question is that writing and wealth lead to technological development. They don't. They might be prerequisites for it — to some degree — but they technology does not flow from such things inherently.
First: Ancient Egypt did have pretty impressive technological development for their time. Their understanding of how to use Nile drainage and water movement was what set up their rule as powerful and broad, allowed them large resource and population surpluses, and made them the largest civilization on Earth for a very, very long time. Their engineering capabilities are remarkably still in evidence, through their mega-structures. Don't dismiss these — they are still remarkable enough that lots of modern people are convinced (foolishly, but nonetheless) that they must have had extraterrestrial help!
Second: What is the prerequisite for technological development? There are many possibilities here but one of the things that seems to absolutely kill it for most of human history is a monolithic state where knowledge and craft production are essentially all bent towards the running of said state.* Egyptians follow what Jim McClellan and Harold Dorn label the "Babylonian model" of science and technology, which is basically the most common mode of science and technology for all Ancient civilizations. It is a reflection of their origins, where technology is a tool of the state for building up economic and political control (e.g., water management, taxation, mega-architecture, etc.). It is (as /r/AlviseFalier points out well) not surprising in a sense that the first major industrial developments take place in Medieval and Early Modern Europe: power was spread, for geographical reasons, more diffusely, encouraging a variety of approaches and competition.
We should also note that Egypt's massive population probably hindered it here as well: if labor is cheap, there is essentially no incentive to find clever ways of automating it. In Medieval/Early Modern Europe, labor was very expensive, and this is considered one of the driving forces for people to come up with clever ways to use machines to increase automation. It is of note, for example, that the Ancient Greeks clearly possessed sufficient knowledge to create labor saving technology — Hero of Alexandria, for example, described all manner of automated devices (usually run by pneumatics) that are actually quite stunning to a modern eye in their sophistication. But he described them in the context of "things that rich Greeks do to pass the time," not "things that the economy required," because the labor model in Ancient Greece (heavily built on slavery) did not require such things. And we should remember that there are high capital costs involved in building up automation, especially early on. To get from "toys and tinkerings" — which many of the big, ancient civilizations had — to industrialization, it seems to have required a very strong economic motivation.
(Why the Greeks and not the Egyptians, you might ask? The Greeks are an interesting case no matter what, but one major distinguishing feature about them is that they were one of the earliest civilizations to value "knowledge for its own sake" and have an individual-attribution model to knowledge. So we know many of their ideas and thoughts, and who said them, because they wrote it all down. In "Babylonian model" civilizations, individual attribution is absent — there is no "inventor" model. New things do show up, but we don't have a record of who made them. We don't have records of people engaging with one another in discussions along these lines. This doesn't mean they didn't do it. But for whatever reason, they did not have a culture that valued writing such things down, with engaging with authors in the past, etc. The Greeks are interesting specifically because they did have this culture, for some reason.)
Which gets to the broader point: We live in an era where technology seems to flow naturally from capital and from civilization. This is a relatively new era in human history (and we will see whether it takes us to good or to ill). This is not because we are smarter than people in the past. It is because our conditions for life have radically changed, and indeed our modern societies, with their absurdly high (by any pre-modern standard) population densities absolutely require such technologies to survive and function. But one should not mistake this for a universal rule — clearly most of human history, this was not the rule.
For a very nice overview of science and technology in world civilizations, James McClellan and Harold Dorn's Science and Technology in World History makes for a good textbook read on the subject, and they are attentive to these sorts of issues.
* This should not be read as some kind of modern-day political commentary, as an aside. Clearly the power of modern monolithic states to produce high technology has been demonstrated, if the state values that end. Both the Nazis and the Soviet Union did a good job of dispelling the notion that democracy or even capitalism are necessary for advanced scientific and technological development. But in pre-modern states, it seems to have been a killer of that kind of development.
Although someone with more knowledge on North Africa and the Middle East can certainly discuss the specifics of Egyptian history, I'd just like to point out that most modern economic development is attributable to the Industrial Revolution, which occurred first in Europe; I'll breifly explain how being a large, prosperous state might not be a sufficient condition to industrialize.
There are a number of theories as to why Europe industrialized, including one that puts it up as pure happenstance, but the most popular is Institutional Development Theory. This theory postulates that the small western european countries in constant competition with each other were pushed to maximize efficiency as well as entrepreneurship, eventually culminating in industrialization. Now, Egypt is a historically prosperous region with a millennial history to be sure, and was the breadbasket of the Roman Empire; the loss of Egypt was one of the most crippling blows to the Byzantine Empire.
But Egypt nonetheless spent much of its early modern history as an appendage of the Ottoman Empire, a state that while certainly very large, had a scale and scope that made increased efficiency needless, even in aspects that initially might not seem important, like commercial and business law. Once the Empire realized that industrialization had allowed its western neighbors to accelerate far past what it could achieve through sheer scale, its attempts at catch-up were too little, too late. But prior to industrialization, it's more than fair to say that apart from some very specific regions (some of Italy, the Netherlands after 1600, maybe the urbanized parts of Eastern France and Western Germany) Egypt and its northern neighbors were more or less on the same developmental footing.
You might be interested in the ideas put forth in these texts:
B. Gupta and D. Ma, “Europe in an Asian mirror: the great divergence”
S. Broadberry and K. O’Rourke (eds.), "The Cambridge Economic History of Europe"
S. Broadberry, "British Economic Growth 1270-1870" (just to get an idea of what the prerequisites for industrialization are)