One of the most talked about topics during the Covid-19 pandemic was the rapid digital shift that the economy and the labour market experienced with levels of remote workers being higher than ever.

 The Malta Business Weekly sat with UĦM CEO Josef Vella to discuss this switch as well as the importance of the Right to Disconnect, which has been recently approved by the majority of the European Parliament, within this context.

Remote-working; evolution of the workplace and work mentality

Vella said that remote working is a positive thing as it is simply building a new concept of what a workplace is which has been too focused on employees getting to work on time and working their designated hours.

“This is the evolution into a task-based working world where we are realising that measuring work on whether an employee works a set number of hours is not the most accurate method of assessment.”

In turn, people have more flexibility with their work hours which is quite impactful for parents who need to work around their children’s schedule, he added.

Apart from helping the individual, remote benefits the company itself since it does not need to stay looking for offices that will accommodate all of its employees as they will never be there together at one go. There is also the reduction in the use of papers as digitalisation has made companies opt for cloud-based storage.

Vella also noted the positive impact it leaves on the environment “as we have seen during the pandemic due to less traffic in the streets leading to a reduction in emissions.”

Despite this positive outlook, he warned against employers taking remote working to the extreme and abusing from it.

“We have come across many situations where employers think that just because they gave employees the option to work remotely, they can contact them at any time. However, just because you provide the tools, it does not mean that you’ve bought that person’s life,” Vella remarked.

“The important thing here is to strike a balance with the person’s quality of life. Do we want an economy based on productivity as an end in itself? If the answer is yes, then we are headed in the right direction with digitalisation. However, I have always been taught that the end goal is for productivity to be a means to an end, that is, the person living a more fulfilled life.”

He said that for this to happen, managers need to be psychologically in favour of remote working, meaning that they have to be ready to change their managing style which requires a change in mentality.

When asked, Vella said that the union has not quite fully understood the government’s stance on this system as it has sent some mixed messages about it when the Covid-19 pandemic was slowing down during the summer seasons and workers were being encouraged to go back to the workplace which left a bad taste among employees.

“Additionally, if you are providing the option of remote working, it should not be the union that is fighting to regulate it; it should be a policy across the board.”

Right to Disconnect; implementation requires holistic approach

Statistics have shown that 30% of telework workers state that they are working during non-working hours as they feel the need to reply to a message, call or email, especially when they are at home. One way in which the EU is trying to regulate this, or any abuse from employers, is through the Right to Disconnect. 

The Malta Business Weekly asked Vella what is required for this right to be implemented locally to which he replied that a holistic approach is required.

“The one thing we really need to be careful of is that the EU releases a directive that is clear and with no room for interpretation. Once this is established, we can implement it in our law and I believe that for this to happen one has to consider the specifics of different jobs,” he said.

As an example, the Right to Disconnect can be easily implemented for clerical work, but the law has to be adapted around the needs of doctors or search and rescue personnel whose profession requires them to be on call.

“The most important thing, however, is how much we will truly believe in this system, respect it and ingrain it into our attitudes. The worst thing that can happen is for employees to look for lacunas in the law in order to abuse it which would prolong the period needed to find the right balance.”

Vella was asked if he thinks that we are lagging behind seeing that countries like France and Spain have implemented similar measures in previous years already.

“Unfortunately, we are always a bit late in anything that we do, and while globalisation has helped in some respects, things like this Right to Disconnect I am not surprised at all that we are at the forefront,” he noted.

He remarked that most rights are raised in countries like France where people are revolutionary and are assertive on what rights they have.

“In Malta, we lack this assertiveness. As our famous saying goes ‘jew nejja jew maħruqa’ (it’s either raw or burnt), we look at extremes, but assertiveness is the middle ground. We have to look at our psycho-social mentality which could be linked to the centuries of colonisation which have made us take the role of servants, waiting for a wake-up call to be handed to us. Things are changing, however, especially with the younger generation.”

Asked if the union plans to help enforce this right, Vella said urged trade union memberships, especially for low-income brackets who are the people with the least leverage in the market. Whenever there’s a union involved, abuse is always lowered, and the government should encourage workers to join unions for this reason.

He explained that he does not have much faith in physical enforcement since it is impossible to check every person within a labour market of 250,000 people.

“We are living in a digitalized world, so we need to find a just-in-time, digital solution,” Vella noted while making reference to the Union’s call for a digital platform that holds all the necessary contracts and clauses that an employer and employee share according to Maltese law which has not been implemented yet despite getting the government’s approval.

The post ‘Providing tools does not mean you’ve bought one’s life’ – UĦM on remote working and Right to Disconnect first appeared on The Malta Business Weekly.

It did so through the launch of a document titled ‘The Public Procurement Reform Report’ which contains 36 recommendations on the entire procurement process and which was penned by a working group dedicated to this matter.

The group was made up of Liz Barbaro Sant, Anton Borg, Marcel K. Mifsud, Maronna Filletti, Mary Gaerty, Roderick Aquilina and Julia Aquilina, with Ganado Advocate Clement Mifsud Bonnici serving as the technical advisor on the process.

“The Malta Chamber has been and is vociferous in its call to represent ethical business across Malta and Gozo. Public procurement represents an important component of business opportunities for economic operators in Malta; it must be done properly and with respect to the law,” Chamber President David Xuereb said during the launch of the document on Wednesday.

He added that all economic operators must be on an equal playing field when tendering for government purchasing opportunities and such procurement exercises must be accessible to all eligible economic, free from impropriety and in compliance with the law.

One of the main recommendations that the Chamber is suggesting is the blacklisting of operators who are in breach of the law.

Mifsud Bonnici explained that any such operator need to be sanctioned and not allowed to participate in public procurement or allowed to enter public contracts, “otherwise the wrong message will be sent to the ethical market and honest operators; the message that everything goes.”

On the other hand, contracting authorities should reward economic operators that comply with the law, not only because this is the right thing to do, but because it is a cost for economic operators to comply with the law and the authorities need to understand the importance of an equal level playing field across economic operators. “This action will assure customers of the effective use of public funds.”

Another key recommendation regards the management and implementation of direct orders.

“The Malta Chamber does not disagree with the concept of directly awarded public contracts so long as their award is firstly, duly substantiated and justified in accordance with the law, adequately publicised and also subject to scrutiny by interested parties,” Mifsud Bonnici explained.

The Chamber is suggesting that awards are publicised through a contract register that will include all public contracts that contracting authorities receive.

The third most important recommendation then relates to the performance of public contracts. The Chamber is calling for the monitoring of such contracts to be made readily available to the private sector as well as other aspects of public procurement, “obviously, with due respect to trade secrets and sensitive commercial information.”

The Malta Chamber believes that in implementing the necessary recommendations, the government will improve the quality of the tendering process, ensure fairness across all economic operators and reassure the public of an equitable use of public funds.

The document has been submitted to the Prime Minister, Finance Minister and also the Director of Contracts already, and the Chamber is currently meeting every contracting company in Malta to clarify their thoughts with them and give relevant support.

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The event took place on Friday morning, where various business and economic experts as well as ministers came together who gave their input on the furture of Malta’s economy through various panels. 

PM Abela started his address by noting that when he was elected it seemed like Malta was at the end of phase of growth putting it at par with EU averages like employment which was nowhere close to what we have now in previous years. 

“People thought that the continuity I promoted in the beginning would not result in anything but it is exactly the foundation which led to our success during this pandemic. When most economies in the world went downhill, we made more investments and increased employment.” 

He explained that the Malta Enterprise approved a total of 190 project investments, both foreign and local over the last year, creating around 1,900 employment opportunities; “24% of which are start-ups who felt confident enough to open a business during a pandemic.” 

Abela said that in the current context there is no room for pessimism since, as a progressive thinker, he does not think that Malta should ever limit its capabilities and made reference to the five pillars on which this government has built its vision for the next ten years. 

The first pillar is good governance which is not only being highlighted in order to focus on recovering Malta’s reputation but ratmher because this government always believed in good governance in of itself, he said. This is followed by quality of life, education, infrastructure – which can all be improved through digitalisation – and most importantly the environment which Abela said is the main factor that will carry this vision forward.  He believes that the environment amalgamates all of the other pillars into one as they are all necessary in order for Malta to reach its Carbon neutrality goals for 2050. This includes restructuring how construction is carried out as well as the transport sector. 

“Our biggest economic opportunity is for a digital and environmentally aware Malta, this is what the new prosperity means,” he concluded. 

Covid-19; effects on global economy and future challenges

Finance Minister Clyde Caruana opened the event by outlining the effects that Covid-19 on the global economy and the future challenges that are expected to result from it. 

“The effect of the pandemic on the global economy is 50 times larger than the recession of 2008 had on the global economy where it took the EU up until 2016 to recovery fully. Thus, the challenges we have coming will be much tougher than that of the recession. I am not saying this to scare you but to make you aware of the challenge we have ahead,” he said. 

He explained that the EU currently taking some decisions that are not wise considering the current contexts like focusing on how to get more money through taxes – “I definitely do not think that this is the time to do that when businesses have already been negatively impacted.” 

Taxation is one of the main things that Malta will be researching in the coming weeks, alongside employment which Caruana said needs to be safeguarded as the worst thing that can happen is for people to start losing their jobs, threatening the economic structure altogether. He also mentioned the need to focus on business productivity. 

He was followed by Ernst and Young partner Chris Meilak who said that this pandemic made people aware of how individual as well as business success has always been evaluated in line with surplus, assets and GPD. “While these are all good, Covid-19 has made us realise that this is one part of the puzzle and there were a lot of decisions we had been postponing which we then had to take immediately.” 

Meilak explained that such decision included new opportunities which Malta has to focus on in the future including digitalisation, funding, lifelong learning and entrepreneurship. 

Businesses moving towards the same goal 

During the first panel discussion the direction in which businesses are headed was discussed with Economy Minister Silvio Schembri saying that Malta is at an advantage due to its size and the functional working relationships that exist within the business community. 

“This makes it easy for us to be agile and adaptable, so much so that we are seeing an amalgamation and these values today,” he remarked. 

When asked how difficult it is for businesses to move towards the same goal, Schembri said that thankfully there has been a lot of understanding from all of the stakeholders despite the challenges that came up. 

“We were working at such a fast economic pace that few businesses had the opportunity to look internally and see if they are doing businesses effectively. This is what the pandemic made us realise, turning our focus on efficient resources and digitalisation. It also showed us that we have a strong and resilient economy in Malta, and it is so because it is diversified.” 

Chamber of Commerce Managing Director Mariza Xuereb also commented on this topic, saying that the pandemic has made everyone aware of the importance of sustainability and productivity. 

“We cannot slack off now, we are still in the preseason of the competition, so we are still training but this means that it is the time solidify our level of competitivity at a global scale.” 

Green economy and sustainability 

The second panel tackled the move towards a green economy and sustainability. 

Energy Minister Miriam Dalli was asked if she is concerned that a sudden shift into a green economy, which is positive, might still create new victims in its trail. 

“We are aware of this challenges that will come ahead, however, there is a transition period, and the change will not happen overnight which will allow us to address any issues that come up along the way,” Dalli remarked. 

She noted that work has to start from somewhere however and her interest is finding those bottlenecks that are hindering investment in this sector, such as roofs that cannot support solar panels. 

“We have an opportunity to take on the green deal and make it our own, for example embarking on more pilot projects relating to water renewable energy which might not be as plausible for other countries that are doing better with solar panels than we are due to their size. We must also look into opening more opportunities for human resources in these sectors through investment and incentives in our education.” 

Former Central Bank Governor Mario Vella shared Dalli’s sentiment, saying that growth does not happen immediately but “this is the time to go on the attack especially with the pandemic and Brexit closing in on us.” 

He highlighted the importance of being concrete and transparent with the information that is delivered to the public as it is “not the time to sell smoke”.

The post New prosperity is based on a more digital and environmentally aware Malta – PM first appeared on The Malta Business Weekly.

Malta has ranked lowest share of electricity from renewable sources according to recent reports from Eurostat why do you think that is?

The main reason would be the limited space we have in Malta, which means that many projects cannot be fully realised.

The easiest places for us to install renewable mechanisms are industrial zones. However, there are a lot of operating factories with old structures which do not support such mechanisms. They would require us to change the roof from asbestos to new technologies completely. To do so, such factories would have to cease ongoing operations for a long stretch. This makes it close to impossible to implement renewable energy changes.

What are the factors that led to this?

As a country, we are moving in the right direction, both educationally and culturally. People know what renewable energy is, and they are conscious of the need to go green. There is a lot of interest from people who tell us that they want to go green. Nevertheless, our most recent surveys tell us that only 25% of Maltese households use solar panels.

One possible limitation is that they do not have enough time to embark on such a project. On top of this, as I mentioned, we face space limitations from our side, which hinder us from realising our projects and making Malta greener.

Some people think that since technology is always upgrading itself, they should wait before committing to what exists on the market today. This is not quite the right way of looking at things. The past has shown us there were no drastic changes in this technology.

In fact, those who use PVs or some types of renewable energy mechanism are happy with their return on investment.

What’s needed to up our ranking?

There is a need for more incentives to promote the importance of green energy.

The government is already helping a lot, but sometimes people need a stronger push. This does not mean that the government should increase the grants to people for such an investment. On the contrary, we have advised the government to reduce them and increase the number of those who qualify. We regularly notice that when the Feed-In Tariff opens, the quota of persons who can benefit from it is filled immediately.

Making more people eligible for the funds will help spread the technology among more households and, in turn, reduce emissions further.

What can be done at a domestic level, and what can be done at a commercial/industrial level?

Space in Malta is very limited. The only relatively large industrial spaces are roofs which, as I mentioned, were not built to handle renewable energy projects. Perhaps with more help from the authorities to lighten the financial burden of structural planning in these areas would help us move forward.

On a domestic level, there are already many financial incentives people can take advantage of like the government’s Feed-In Tariff and Green bank loans. The latter is provided by almost every bank in Malta. Through it, the families end up forking out virtually no money to pay back the loan, thanks to the savings that they receive from investing in such projects. On top of this, the government’s Feed-In Tariff goes directly to the bank which automatically pays for the loan. On an industrial level, a parallel situation could also be set in motion.

Over the years, Electrofix has branched out into Renewable Energy and Fuel Station Construction and today the company is soundly structured on these 3 strong pillars. Today Electrofix employees over 100 certified/qualified technical staff, sales executives, marketing executives, engineers and management.

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On Tuesday, the new wage supplement scheme was announced. It removed the previous Annex system and introduced a tiered system for the supplement based on businesses’ VAT returns by comparing 2019 and 2020 results.

This move has received positive feedback from representatives of the business sector – namely President of the Malta Hotels and Restaurants Association (MHRA) Tony Zahra, CEO of the Malta Chamber of SMEs Abigail Mamo and President of the Chamber of Commerce David Xuereb.

All representatives agree that the new scheme promotes more fairness across the board as it is based on a more holistic system wherein those who need the most help will be better recognized, while those businesses that actually did better during the pandemic will not receive the supplement.

“At the end of the day, assistance should be provided to those who need it the most,” Zahra told this newsroom, noting that all of the Association’s members had already been consulted on this new system and reacted positively.

Mamo reciprocated this sentiment, saying that, in principle, the new scheme is a positive change as it shows that Malta has learned from and improved on previous experiences.

“However, the devil is in the detail which can only be seen in practice and our members have some uncertainties as to how it will be implemented and how it will impact them. But there have not been any bad reactions.”

From his end, Xuereb explained that the Chamber of Commerce had already brought up the argument on helping businesses depending on how badly the pandemic was affecting that particular business.

“Now it is no longer about having long arguments over which sectors belong in which Annex; it is a true measure of performance which we are pleased with.”

All three representatives also mentioned their satisfaction with the government recognising and providing wage subsidies for employees that are hired to replace employees that left during the pandemic. This was not being done in the previous system, as employers were not being given a subsidy for any replacements they hire to take over the jobs of previous employees.

Future measures and support

The Malta Independent also asked each representative if they envisage the need for any future measures that would help businesses even more as Malta makes its way to recovery in the coming months.

MHRA President Zahra said that the situation is what it is, and everything now depends on the vaccine’s rollout.

“What we need is for the vaccine to work and the quicker it does, the quicker we will get out of this problem. It is good to encourage people to use our member’s services and the vouchers are a plus, but our survival depends on the vaccine as this will bring more tourists back to Malta.”

He also believes that more focus should be put on Destination Malta, as Andre Bocelli’s musical performance is already doing. “This will benefit the country as a whole since Malta needs endorsements from such globally renowned individuals, promoting our country as an ideal place to visit, be it for business or relaxation.”

Vice-President Mamo spoke of the need for the wage supplement to be extended beyond March as businesses need a longer period in order to overcome the insecurities the pandemic created.

“The government told us that considering the scenario we are working in, it cannot commit to anything further than March, but we are already discussing what will happen beyond March as certain sectors like tourism need to plan ahead.”

She also noted that there is a need for more aggressive schemes that encourage businesses to restructure. “Businesses have a lot of debt piling up, and at the same time we are telling them to reinvest and reinvent themselves, but they will need much more support to do so.”

Additionally, she encouraged the government to inform businesses about its plans to restructure the economy so that it would no longer be as dependent on tourism.

Chamber of Commerce President Xuereb also noted the importance of restructuring Malta’s economy saying that, while the government did well to focus on the preservation of employment, the point of focus must now shift to help businesses grow.

“We cannot talk about preservation anymore. We are now at a stage where action needs to be taken and where we need to explore new economic sectors driven by digitalisation, talent, quality of life and climate change. That is where we need to be.”

He explained that what gives Malta its competitive edge in this regard is its size; “we are nimble, and we can be efficient and therefore are able to implement change better than other countries. Let us hope that we do not lose out on this opportunity.”

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On Tuesday, the EU published statistics showing the percentage of the share of energy that is used to fuel heating and cooling systems in households, industrial processes, hospitals, schools and other establishments coming from renewable sources across all member states during 2019.

The report shows that the EU average stands at 22.1%, which is almost double the amount from 2004 (11.7%), and a 0.9% increase from 2018 where the average stood at 21.2%.

The state that registered the highest share of renewable sources in heating and cooling in 2019 was Sweden standing at a commendable 66.1%, followed by Latvia (57.8%) and Finland (57.5%).

On the flip side, the lowest ranking state was Ireland with a 6.3% share of renewable energy.

Malta found itself right in the middle of this scale with renewable energy making up 25.7% of the energy that is used for heating and cooling. This is a 2.7% increase from the 2018 report, making Malta part of the twenty state members that experienced an increase between 2018 and 2019.

Notably, in 2019, Eurostat statistics showed that renewably sourced energy made up just 8.5% of the overall amount of energy that was generated that year in Malta, placing it second to last among all EU member states. The EU average stood at 19.7%.

Yet, there is still a noticeable increase from year to year in these statistics which can be paralleled to the gradual increase in amount of renewable energy that accounts for heating and cooling in Malta.

In 2017, renewable energy made up 7.2% of overall energy generated in Malta which went up to 7.9% in 2018.

Renewable energy has been highly debated among Maltese politicians at both a local and European level.

The recently elected Energy Minister Miriam Dalli has been at the forefront of such discussions on both levels. She has insisted that Malta needs to continue diversifying its energy mix, not only to ensure energy independence but also to increase its share of renewable sources of energy.

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This information comes from newly appointed Finance Minister Clyde Caruana who was replying to a parliamentary question put forward by recently elected PN MP Joseph Ellis. The extent of the loan is most likely due to the Covid-19 pandemic and the measures to sustain the economy.

Ellis asked the Minister to delineate the amount of money that the government borrowed year by year from 2013 until the end of June 2020 and the average interest rate being paid on these loans.

Caruana presented statistics showing the amount of debt issued by the government within this timeframe with a maturity of more than one year, coming from government stocks and Retail Saving Bonds.

He noted that the amounts do not include the cost of €10.16 million nominally in government stocks issued to the Ecclesiastic Entities under the agreement between the Government of Malta and the Holy See, signed on 28 November 1991.

The statistics showed that in 2013 the government loaned €777,083,600 with an interest rate of 3.71%.

This is almost the same amount that the government loaned during the first half of this year, €700 million (with a 0.27% interest rate).

Figures for other years then indicate that the government was gradually decreasing the amount of loans it got year by year.

In 2014, the government borrowed €648,841,400 (3.97% interest rate), in 2015 it borrowed €473,234,600 (2.03% interest), in 2016 it borrowed €597,901,700 (1.57% interest), in 2017 it borrowed €357,409,000 (1.57% interest rate) and in 2018 it borrowed €243,526,500 (1.58% interest rate).

During 2019, the government then borrowed €449,712,800 (0.82% interest rate).

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This was one of the main takeaways from the second day of the EY Future Realised conference which brought together numerous speakers who discussed the technological advancements that COVID-19 has brought with it in the working world.

How covid-19 has turbo-charged the digital revolution

Former PM of The Netherlands Prof Jan Peter Balkenende opened the conference by saying that while COVID has been a terrible time economically, there has been exponential innovation as happens during times of crisis.

He noted that when it comes to innovation, 25% has to do with technicalities while the remaining 75% has to do with social dimensions.

“It is about reinventing our mindset and business model and I am convinced that the new economy has to do with creativity; the real innovators of today are the winners of tomorrow.”

Tony Qui, EY Global’s Chief Innovation Officer, echoed Balkenende’s statement, saying that while businesses continue to globalise and optimise efficient supply chains through technological means, the most influential element is the social dimension. This includes a change in customer behaviour, movement to flexible working and data-driven services which is the new oil that drives new services and the economy.

“What has really changed is one in behaviour driven by lockdown which has impacted how we perceive our normal way of life as interaction was highly restricted. In all of these changes, there is one common theme; technology. It is the glue and capability for businesspersons to manage their business, for students to attend schools and for citizens to get groceries and even health services.”

Qui explained that in times of adversity, the key thing is adapting to change, and innovation will be critical to the success of companies and governments and social services.

“In reality, it (COVID-19) is a good wakeup call and reset for individuals and businesses in order to adapt innovative services. We will never turn back to our normal way of lives and behaviours. These changes will become habits and habits become hard to break. With new innovation coming out, the public will be more receptive and accepting for new way of life and encourage tech an innovation.”

He was asked for tips on how Maltese companies can accelerate these changes and take advantage of new tech opportunities. Firstly, Qui suggested that businesses revaluate their operations and strategy by looking at the mix between man, machines, tasks and operations and see where they can integrate technology.

Secondly, he mentioned scenario planning by looking at how they can reskill their workforce and consider the cultural aspect as well in order develop an adaptive culture and become more resilient in this everchanging world.

Finally, businesses should establish a diverse and resilient ecosystem of partners they can work with so that they can accelerate delivering new capabilities and services.

The abolishment of the idea of going back to normal was also a key point that HotJar CEO David Darmanin, who has been working remotely since 2012, suggested for companies to get to grips with the new way of working.

“Stop thinking about going back to normal, it is too dangerous to think like this and we need to accept the world we live in and move on. We cannot afford to plan about going back to normal. We must keep in mind that what we are going back to is abnormal” 

He said that it is a risk for businesses who have switched to remote working to think in a centralised way with nodes coming out of the centre. Thus, to be successful businesses have to make a shift in mindset and see the nodes as a mash that is interconnected, regardless of people’s positions.

Darmanin said that in order to be successful in this climate businesses need certain ingredients starting with having full trust in the team from day zero and empower employees. Companies also need to also build trust through transparency while adopting action-based codified values.

There should also be a shared ownership model so that teams do not have a fear of missing out as we cannot be involved in everything we are doing. Most companies need a focus on purpose by asking why one’s company exist in the industry.

Timo Elliott, Innovation Evangelist at SAP, explained that informal processes have had to be thrown out of the window because of this pandemic reflected in the increase in demand for data.

“New data and technologies will help survive the present and evolve into the future. We have to be prepared to act and react faster than other businesses. People who can lead change and pioneer processes will thrive in the coming years and the key skills for this are creativity and leadership.”

Artificial Intelligence; how to put it into good use and the challenges it comes with

A major driver in today’s technological advancements in Artificial Intelligence (AI) which Keith Strier, VP of worldwide from Nvidia, works closely with.

He explained that while AI is not new, national AI strategies are so now it is time to start turning these strategies into action by implementing them, as should be the case for Malta’s AI strategy which Strier himself worked on.  

Strier warned that one can never get ahead for the curb because it is exponential. The speed of computing is doubling every two years due to innovation in both hardware and software. However, he noted that AI has now become the engine for economic growth and to inspire youths to create new projects. It also helps governments to deliver information and plan whole cities ahead of time.

One challenge the world is facing in AI is that AI computers are the most complex in the world and they are only available to around one-third of the work; the majority sitting in US and China.

Head of the UN Centre for AI and Robotics (UNICRI), Irakli Beridze, also mentioned the digital divide between highly developed and underdeveloped countries which AI is bringing about while discussing the dark side of this innovative mechanism.

He explained that such developed countries should not forget about the rest of the world and that governments should start looking at creating new working opportunities for their people due to the rise in automation.

“It is predicted that by 2025, 50% of current jobs will be automated which will result in unemployment. We have to focus on minimising risks and maximising benefits,” he said.

Another challenge that comes with AI is privacy, something which Jackie Mallia, GVZH Advocates Consultant and AI Taskforce Legal and Ethical Chair, elaborated on.

“Everything online is captured which means that all this human experience becomes behavioural data in the hands of our companies. AI contributes to the processing power of this data and while this is good it brings the problem of privacy.”

She explained that in Malta, as an EU citizen, people are protected by GDPR which has three main benefits; it limits data collection limits the second reuse of data and also limits automation of decisions taken by machines through human intervention.

As part of their work, the AI task force came up with a framework for the use of AI which is based on four pillars. Firstly, human autonomy so that AI developments do not override the human person. The other pillars include the prevention of harm, fairness and explainability.

“AI is both beneficial and dangerous which is by we try to regulate it but, of course, this takes us to the debate of how much regulation is too much that it would limit development.”

Malta’s telecoms infrastructure attractiveness for FDI

Former Chairmen of the Malta Communications Authority (MCA), Phillip Micallef and Dr Edward Woods attributed Malta’s success in Foreign Direct Investment (FDI) to having three telecom providers despite its small size and the fact that telecom regulators always ensured there is a level playing field.

MCA CEO Jesmond Bugeja explained that the people working with the Authority are also a large percentage of its success in effective regulation for new markets

“The communication sector has proven to be important in helping social wellbeing and economic activity through virtual social proximity, remote working and e-commerce. The recent pandemic severed as a test for our regulation and the resilience of the industry.”

One thing to note is that telecoms and innovation must complement each other and while, Malta’s telecom sector is thriving FDI companies are saying we have an overall weak innovation capacity.

Asked what the next step for telecommunications in Malta is to maintain its competitiveness, MCA CEO Bugeja said that, considering the lighting speed of progress, it is important for regulation to keep evolving in order to address the new challenges ahead.

He said that the Association will keep implementing the necessary building blocks to allow industries to roll out new infrastructure and services. This includes the earmarked radio spectrum which will be shortly made available for the market to be used for 5G. Lastly, the MCA will continue to invest in its people, capabilities and knowledge while ensuring that national regulatory measures are timely and appropriate and sustainable.

GO CEO Nikhil Patil explained that one must look at innovation from a digital perspective since it encompasses so many things in our lives.

“Having access to digital skills is key in having a good life in today’s world so innovation is important for the future prosperity of Malta.”

He explained that everyone has spoken about investing in digital infrastructure but a basic foundation is still required, which infrastructure is a necessary condition but not sufficient for innovation to thrive. 

“I will be very unhappy if at the end of the day we just enabled people to watch more Netflix which would be a destructive value exercise. Thus, we need the second step, investing in digital skill and education.”

CEO of Malta Enterprise, Kurt Farrugia was asked how Malta can improve its innovation capabilities and what are plans there are to strengthen Malta’s technological ecosystem in a post-COVID-19 world.

He said that Malta is at the forefront in developments regarding AI especially in relation to FinTech, ChatBox, application on KYC/AML solutions, financial payment gateways and also digital games.

Investors in these areas are not only setting up collaborations but also collaborating with the University of Malta which is an important enabler for Required Minimum Distribution (RMD) driven companies.

Malta is thus proving itself to be able to provide highly skilled indigenous talent, both experienced and university graduates, at a very competitive cost. 

Additionally, Internet of Things (IoT) and 5G are areas of interest from an investment point of view.  Farrugia said that the size of the island allows for the facilitation of these new technologies by being a place for the assessment and testing phase. This is serving as a springboard for various markets and Malta can serve as a test solution for various applications.
He added that the use of IoT can also be combined with smart farming so testing of technologies can be used on parallel with various crops. It can also be used to anlayse agricultural systems alike irrigation and growth.

“Malta is an incubation island where great ideas can find accessibility to institutions and a testbed for technology.”

Other speakers at the conference were; Antonio Matera (OpenText), Michael Azzopardi (leader of Technology Consulting at EY Malta), Kate MacDonald (Digital Special Advisor to New Zealand Government and World Economic Forum AI & Machine Learning Fellow), Vladislav Severa (LearnerOn.Net Founder, LongevityTech.Fund Partner and Co-founder), Harald Rösch (Melita CEO), Tamás Bányai (Vodafone CEO), and Rani Yadav-Ranjan (Global Head AI Technology & Innovation at Ericsson Accelerator).

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On Monday, the government announced its measures for the budget for next year and has since then received quite a mix of opinions from stakeholders and civil society, with some saying that it lacks vision for the future. 

This newsroom spoke with persons working in the economic or financial sectors to get a professional opinion on the matter. 

Balance between short term and long term

“The budget encompassed immediate measures that are required for the current circumstances together with a long-term vision,” Financial Analyst Steve Ellul told this newsroom. 

He explained that the continuation of the measures that were implemented during the pandemic was indispensable, such as the wage subsidies which provide the peace of mind that entrepreneurs needed. “I also liked the voucher system as it works in Malta due to our size; it is not a clichè.” 

He touched on the fact that these vouchers will not be introduced immediately which means that it will probably be implemented when numbers start to dwindle once again which is an important factor. 

With regards to the long-term vision, Ellul paid particular attention to what was said in the budget about having a Green Economy. He believes that the budget has the long-term measures to achieve this goal which compliments the PM statement that one of the 5 pillars of this budget was achieving carbon neutrality by 2050. 

He noted that having the Malta Stock Exchange issue an attractive package of Green Bonds that can be used to finance projects that promote renewable energy and reduce emissions is a great way to incentivise the private sector to participate in a Green Economy. “I will be looking forward to its implementation.” 

Economist and lecturer and the University of Malta Stephanie Fabri also believes that the budget involves a continuation of the short-term measures, and an indication of what we are expecting from a post-COVID economy, while also focusing on the social element.

“The continuation of the COVID-19 measures such as the wage supplement were to be expected and are important. The fact that there were no increases in taxes is also important for businesses and people in general.”

She picked on the VAT exemption threshold which been increased from €20,000 to €30,000 which is a positive move in her opinion – “measures continue to support the property market which at the moment is an important sector for our economy.” Other positive measures she noted include investment in education and upgrading of health facilities as well as the long-awaited Venture Capital Fund which is crucial for propping start-ups and boosting the innovation eco-system. 

From his end, Grant Thornton Malta Partner George Vella said that there were more measures that he was expecting from this year’s budget, especially with regards to projects that will allow investors to keep investing in the future. 

He said that the budget shows the government’s focus on ensuring tat consumers’ confidence is resorted and supported, however, he wanted to see more efforts into increasing investors’ confidence as well. 

Vella also noted that the deficits which the government is projecting for the coming year is higher than he expected which shows that it is pushing as much as it can with its measures while keeping debt under control since the figure being stipulated for 2023 does not exceed 60%. 

Not true that budget lack vision 

The Malta Independent also asked if they agree with the Malta Employers’ Association (MEA) reaction to the budget, saying that it lacked vision. 

Financial Analyst Ellul said that when one can see a balance when they analyse it well and consider where most of the money is being spent, that is, in the Green Economy and sizeable infrastructural projects that will attract new sectors and industries. 

“I see a lot of validity in the fact that earmarked projects were not curtailed like what happened in other countries which shows that the government has a vision for where it is headed.” 

Grant Thornton Malta Partner Vella shared Ellul’s sentiment, saying that the €400 million investment in industrial parks, €220 million RRF grant and the government’s call for EU state aid for AirMalta a clear reflection of future vision. 

“It is logical to first think about how to keep people afloat in this situation. The investment which will benefit the future becomes second priority.” 

On a different note, Economist Fabri found it interesting that while MEA notes that the budget lacks vision, The Malta Chamber states that the budget is not addressing the impact that COVID is having on the economy, mainly on businesses. “So, if you combine both statements, from the perception of the employers at least, the budget is not addressing the short- or long-term.” 

She explained that the scars COVID-19 is leaving on our economy are deep and the business community is constantly battling against various uncertainties especially due to the international situation which seems to worsen by the day. 

For the short-term, Fabri acknowledged that guidance the government provided to address the crisis but noted that the economy is based on perception and the business community needs further guidance, and reassurance that the government is constantly striving to address the financial and economic impact of COVID-19. 

With regards to the long-term, she thinks that through this budget the government is indicating where it wants to go post COVID, yet, while welcoming investment in areas for growth, further clarification is needed with regards to the how are we going to get there. 

“The answer cannot be provided overnight, it has to involve a thorough consultation process (starting from our children to elderly to employees, business people, self-employed, vulnerable persons, the list goes on), and the measures need to be designed by experts and practitioners that come from various backgrounds. Why? Because this reshaping of our economy involves considerable long-term investment that needs commitment from all decision-makers. I think this is what the business community is after, a clearer direction of HOW, in order to be able to plan their investments which will ultimately boost their confidence.” 

Having said this, she said it is important to note that it is not only businesses that are experiencing financial difficulties and increasing uncertainties. “The government is also facing such turbulent times, the fiscal situation is expected to deteriorate for a while, which puts the government in a more difficult position when it comes to designing and implementing measures.”

The post Budget 2021 found a balance between short and long-term measures – economists first appeared on The Malta Business Weekly.

This government has been at the forefront in safeguarding and promoting youths as well as voluntary organisations who it considered to be high contributors of services within society. While Budget 2021 does not say much about youths due to the pending National Youth Policy 2021-2030, voluntary organisations will be benefitting financially while also moving towards being more transparent.

National Politics on Youths

With regard to youths, the budget notes the ongoing public consultation on National Youth Policy 2021-2030, entitled ‘Towards 2030 – Reaching out to, working with, and supporting young people’, which will be focusing on all young people aged 13-30.

The government is promising that all those people, groups and organisations working for and with young people have the opportunity to participate actively and contribute to the development and implementation of this policy.

Voluntary Organisations

From next year, voluntary organisations, which are registered as such and are following what is stipulated in the law governing those same organisations, will be exempted from paying tax on any profit they make during the year, if their annual income does not exceed fifty thousand euros (€50,000).

At the same time, we will be seeing that voluntary organisations are transparent about the donations they receive and how these donations are spent in order to ensure the maintenance of trust that the Maltese and Gozitan public has in these organisations.

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