It is imperative, however, that domestic demand be reinforced so as not to perpetuate a dependence on foreign markets alone, warned Alaa Agamawi, head of the Software Development Society. The Egyptian market should give a competitive advantage to Egyptian companies, otherwise there is a danger that local developers will become only tools of foreign companies. This would be attained by helping the Egyptian private sector set up small and medium sized IT enterprises, and restructuring investment incentive laws. Beyond smart villages, infrastructural upgrading is needed in the telecommunications sector in general. One should not underestimate the strength of Israel's IT sector in particular.
Multinational companies are now re-exporting software developed in Israel.
The government has done an excellent job through initiatives with the multinational software companies to generate a calibre of software producers who can compete with a company like Microsoft. He believes that Egypt's software market would lie in Europe, rather than the Arab countries, since in the former there is a rising demand for software applications in Arabic. Despite the expanding demand for IT, he believes the government still needs to involve itself more actively in promoting the use of information technology in every day life.