It is often said that anyone alive in the industrialised world a century ago, upon observing the then steady pace of development of all manner of agricultural machinery, would have been justified in foreseeing that there would be, 100 years on, wholesale unemployment of would-be manual agricultural workers. Of course, at the time, there was no way of predicting that people would have moved on to creating websites or writing software.
Planning for the digital economy and for innovation is to plan for the years to come. It is not always straightforward, but it is our guarantee that the economic successes of the present will be sustained in the future. There are very important challenges, of course, and there have been setbacks, such as the tech-bubble of the late 1990s and early 2000s.
And yet, many of the firms that have survived it and thrived, like Google, Amazon and Facebook, remain very innovative and at the forefront of technology.
In the final reckoning, there is no denying that we are living in an economy that, in just 30 years, has been irreversibly transformed, and entirely beyond recognition, by digital technologies. It is an economy in which direct manufacturing jobs are slowly disappearing, and in which data itself has become a currency.
I have already publicly explained on several occasions that the government’s strategy for the digital economy is to lead the way. We have not shied away from ‘inventing the wheel’ where there was no ‘wheel’ to be had, as when developing the legislative framework for Distributed Ledger Technologies (DLTs) as part of our blockchain strategy that is designed to attract Fintech and other companies to the islands. We also welcome a number of new initiatives taken by the European Commission and other European counterparts since then.
The government is fully aware that the financial services sector is also evolving in the wake of the emerging digital technologies, making this traditionally conservative industry more innovative and dynamic. The 2020 budget will continue to support the diversification of the economy by supporting the necessary reforms that are already underway in the financial sector, and by actively proposing the exploration of new niches in the digital economy such as artificial intelligence and the video gaming sector. This will ensure sustainability of the economy for the years to come.
Budget 2020 will go a long way towards supporting our search for new economic niches that we can explore, and I believe unreservedly that we will make the best of them as we have always done
The government’s record in creating new financial services jobs speaks for itself: an increase of 1,900 over five years, and another 1,140 just in the two years since the start of the blockchain project. The latter result was directly partly attributable to the project because of the potential for Fintech, or the intersection between finance and technology, and RegTech, focusing on technologies that facilitate the delivery of regulatory requirements.
In the budget press event with Minister Edward Scicluna, I announced that in the iGaming sector there are 134 new applications from companies who have expressed their desire to obtain an MGA license and set up shop in Malta. In the coming year, we will continue to support the sector and explore even more opportunities that are sure to present themselves.
Some of the criticism that is levelled at the government regarding our digital economy strategy is that this country, uniquely among the developed countries, lacks the requisite skills, the human capital, to supply the sector. Recently, I had the opportunity to explain on TVM, specifically on Xtra, that this is not a problem that is ours alone. This is an extremely novel industry for everyone, and although we are aware of the skills mismatch that exists between supply and demand, we also know that other countries have the same problem.
In this regard, we needed to respond quickly, and we have done so to great effect. We have worked very closely with the University of Malta and Mcast to develop and launch, starting from last year, specialised degree courses to address the gaps.
The changes are not restricted to the IT department, but also involve other disciplines such as law, accountancy, management, and engineering. We have also offered a number of post-graduate scholarships at masters and doctorate levels for areas related to digital ledger technology including Fintech and Regtech. We were pleasantly surprised that these were subscribed twice over, but we decided to increase the budget to accommodate all the applicants.
Together with Mcast, through EGIM, we have also launched a new diploma in iGaming which so far has attracted more than 60 full time students.
An initiative that came as a result of consultation with the industry.
Likewise, another consultation process is taking place with the videogaming sector in order to help our educational institutions continue to upgrade their infrastructure and course programmes. This year’s budget plans for such an investment in line with the recently launched strategy for the growth of the video game development industry in Malta.
In 2020, we will give added impetus to the digital economy strategy, secure in the knowledge that it will soon become a net contributor to Malta’s economic growth. We will also be investing heavily in promotion on an international level. We will be relentless in our efforts to attract new investment, while being always vigilant and fully aware of the challenges posed by cross-border issues such as money laundering. We will be investing heavily in the latest technologies to combat crime, in line with our international and EU commitments.
I feel that Budget 2020 will go a long way towards supporting our search for new economic niches that we can explore, and I believe unreservedly that we will make the best of them as we have always done, with the assurance and aplomb that distinguishes us as a nation.
In this quest we are resolved, as ever, to keep well ahead of the pack.
Silvio Schembri is Parliamentary Secretary for Financial Services, Digital Economy and Innovation.