Malta's Digital Economy is steadily on the rise. Since the 1990s, Malta has emerged as a dynamic force in the ICT Sector. The island's proactive approach in nurturing tech start-ups, fostering innovation, and establishing forward-thinking regulatory frameworks has positioned it at the very forefront of the digital world.
The Evolution of Malta's Digitalisation
MALTA'S DIGITAL ECONOMY
Malta's pioneering efforts in blockchain and cryptocurrency regulations are particularly noteworthy. As one of the first countries to implement a comprehensive legal framework for these technologies, Malta has attracted numerous blockchain enterprises. Beyond blockchain, Malta's economic climate is attracting high-speed internet infrastructure investments. As a result of this, Malta has seen a rise in the digitisation of services, both for government services further ad the private sector. Undoubtedly, this underscores Malta's commitment to creating a digitally inclusive environment for businesses and citizens alike.
Malta's Strategic Advancements in Digital Innovation and Tech Expansion
MALTA'S DIGITAL ECONOMY
With the digital sectors now contributing to over 20% of Malta's economy, the government anticipates further growth in its Gross Domestic Product (GDP), driven by strategic investments in areas such as blockchain and cryptocurrency. The country's regulatory framework has been an important catalyst for the local digital economy, particularly in areas such as Artificial Intelligence (AI), Virtual Financial Assets (VFAs), and cybersecurity.
A prime example of this is the VFA Act (Cap. 330 of the Laws of Malta). It provides a clear legal structure for the regulation of VFAs and Initial Coin Offerings (ICOs), cryptocurrency exchanges, and other VFA services, making Malta a global pioneer in the cryptocurrency and blockchain space. Beyond that, the growing iGaming industry continues to be one of Malta's strongest economic pillars, further driving economic expansion and innovation.
The Malta Digital Innovation Authority (MDIA) proves to be integral to this framework by certifying technology arrangements and enforcing high compliance standards. To gain a competitive advantage, Malta has also developed a national AI Strategy, aiming to create a solid AI ecosystem through investments, start-up support and innovation. Furthermore, the country is successfully implementing stringent cybersecurity policies aligned with EU legislation to enhance the resilience of critical infrastructure and services against cyber threats.
Malta has also solidified its position as a tech hub by organising global technology-oriented events that attract international recognition. These events facilitate significant business deals and invite major companies to explore opportunities in Malta. Whilst featuring experienced industry leaders and speakers during these events has proved to be a great way to enhance local professionals' knowledge, as well as boosting Malta's technology profile on the global stage.
The Rise of Unicorn Start-Ups in Malta
MALTA'S DIGITAL ECONOMY
A 'Unicorn' is a start-up company which is privately owned and valued at over $1 billion. In 2022, Malta was home to three unicorns, indicating steady progress, with the first Maltese unicorn registered in 2017. Malta aims to attract more unicorns and establish itself as a premier centre for start-ups in industries such as aviation, maritime, eSports, and gaming. The country's favourable regulatory environment, strategic approach to innovative digital technologies, public support measures, robust digital infrastructure, competitive tax regime, and access to the European Union (EU) market make it an attractive destination for high-value companies. Furthermore, Malta's skilled workforce, multilingual capabilities, and high quality of life add to its appeal for global tech companies seeking to establish or expand their presence in Europe.
Malta's Digital Strategy
MALTA'S DIGITAL ECONOMY
The European Commission's Digital Decade strategy outlines the EU's vision for digital transformation by 2030. Its focus is on four key areas: digital skills, infrastructures, businesses, and public e-services. This strategy aims to boost the EU's global competitiveness, promote innovation, and foster economic growth by investing in cutting-edge digital technologies. Nonetheless, the success of the Digital Decade hinges on high levels of cooperation and reform at all EU and national levels.
Malta has been putting considerable efforts to meet these objectives. The Digital Decade Country Report submitted in 2023 notes that Malta performs above the EU average on basic digital skills. Gaps remain, however, particularly among disadvantaged groups. The Report lists several governmental initiatives including investments in digital literacy training programmes, digital teaching, and learning resources.
Additional programmes are available, some of which focus on enhancing computing competences for educators, and on providing training for vulnerable groups through the 'One Tablet per Child' and the 'Digital Connect' schemes: providing low-income households with a laptop and an internet connection.
In terms of gender convergence, there's Tech.mt proactive incentive to train women in basic and advanced digital skills. The eSkills Malta Foundation also played a significant role by launching the Malta Digital Skills and Jobs Platform, offering a single access point to courses, jobs, events, and best practices related to digital skills in Malta.
As a result of these economic and market shifts, vacancies have spawned for a variety of tech roles, such as Software Developers, Software Engineers, IT System Administrators, Data Scientists, Data Analysts, IT Analysts, and IT Officers. Both established international and local enterprises seek tech professionals to fortify their respective IT departments and general workforce. Smaller companies and start-ups also recruit IT experts to oversee the regulatory compliance of their tech systems with any national and EU legislative frameworks.
DIGITAL INFRASTRUCTURE IN MALTA
Malta has also made substantial progress on 5G and fibre coverage, strengthening its overall connectivity performance. While the country has already reached the gigabit connectivity target for the Digital Decade, obstacles remain due to weakened network efficiencies and a lack of resilience, which could eventually inhibit further progress to symmetric gigabit speeds. Currently, a large part of Malta's connectivity networks is aerial, and bringing it underground would require improved access to physical infrastructure and better coordination of civil works, according to operators.
What are Malta's Key Challenges?
MALTA'S DIGITAL ECONOMY
Despite a comparatively good performance in the uptake of digital technologies, Malta falls behind the EU average in research and innovation (R&I), according to the European Innovation Scoreboard 2022. This is due to lower investments in R&I, gaps in human resources dedicated to R&I, underperformance in generating innovation output, lagging digital adoption and skills development, business R&I expenditures, and weak collaboration between the private sector and research institutions.
Conclusion
MALTA'S DIGITAL ECONOMY
Malta can be considered a hotbed for technological advancements. The future of the Maltese digital economy is likely to see further growth and diversification, driven by the continuous investments in emerging technologies. With numerous initiatives aiming to improve the island's digital infrastructure, Malta is not only enhancing its economic elasticity, but also creating a sustainable, competitive, and digital economy for the future.
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