Over the last 10 years Malta has become a great attraction for fintech and iGaming companies. On a more careful review of the IT sector in Malta, one major source of employment sticks out and seems to have surpassed all else – the iGaming industry.
Malta has become a home to more than 250 iGaming companies hitting a whopping count of 6,500 full time employees. Recent estimates point that the industry is accountable for roughly 12 per cent of the national GDP.
Much of it is due to the fact that Malta was one of the first countries to embrace the iGaming sector, possibly even being the first to regulate the industry and started a licensing scheme for iGaming companies. In 2017 the Malta Gaming Authority published a white paper, proposing to reform the legal system around iGaming and making it even easier for companies to establish their businesses and operate in the region.
Although Malta is still enjoying a boom in the sector, it seems other digital industries did not share the same fate and benefits as the iGaming one.
A centralised market for job opportunities with iGaming in its centre is a double-edged sword. On the one hand the growth curve sector peaks, which in turn attracts multiple businesses into the country and presents opportunities for talented foreigners to relocate their career to the island. On the other hand, for the very same reason we now witness an inflation in rent costs, relocation packages, salaries, titles and overall benefits that companies have to adhere to, to stay relevant in the face of rising competition.
A new challenging situation has now emerged in which proficiencies can no longer stand in line with the inflation in salaries, essentially flattening the curve of proficiency vs payroll and titles. Add into the mix that most companies fall in the trap of constantly trying to poach talents from their competitors instead of placing real effort into training and education, and we have ourselves an unsustainable bubble.
The industry is accountable for 12 per cent of the national GDP
A recent study conducted by the MGA found that 730 positions remain open as reported by gaming companies on the island with an astonishing 68 per cent of those in operational level positions meaning middle managers and their teams, the actual engine of growth for companies. In the report, it stated the main reasons for those roles remaining vacant are lack of skill, experience or qualification.
It is becoming clear that the only long-term sustainable strategy for the job market and the Maltese economy is probably adding and developing new digital industries while in parallel setting frameworks for proper education, training and internship infrastructures which will in turn attract and grow talents locally.
Addressing the skill gap can be done by addressing the supplementary needs of the dominating iGaming sector. This means having a strong backbone of digital marketing experts, data insights capabilities and cybersecurity.
Furthermore efforts must be placed into encouragement of the young entrepreneurs generation in Malta and Europe to pursue their ideas and start-ups in a convenient digital business -friendly environment, through providing infrastructure, training and education programmes which will encourage them to invest in Malta.
We need to change the mindset of the young generation locally, not to fear failure but embrace it. Raising and supporting the next generation of entrepreneurs and self-employed individuals is the real deal and the long-term win-win that the country needs.
So how do we move forward?
Long-term, there is no way around it – the Maltese authorities will have to make genuine efforts in infrastructure and subsidies of start-up and digital education programmes to be able to attract more talents and grow them from within, the only sustainable strategy for the digital economy is diversity of technology industries.
Every place has its bright minds and brave souls. We need to take advantage of this – one possible solution for companies is to create a multi-location operation based on skill and market advantages. For example, eastern European countries are well known for their robust developers economy, coding and R&D, with an abundance of talents on the job market.
If companies do not have the resources or the knowledge of opening a multi-location operation, they can also outsource specific functions within their companies, the more prevalent ones being development and SEO, having a small number of highly skills individual onsite, managing a much larger team from a nearshore location – this can be a transitional phase for companies before opening their own additional locations.
Ori Zilbershtein is currently Chief Business Development Officer at Hyperion Tech and is a digital growth expert.