As I was just about to write this week’s article, in came the last IMF report on Malta. In this report, IMF repeated the emphasis on improving Malta’s productivity and making sure that Malta’s present and more importantly, future labour force, is equipped with the needed digital skills.
In fact the IMF report says: “Promoting high-productivity economic activity and innovation is essential for sustainable long-term growth. Public and private spending on research and development in Malta is low… Innovation and digitalization require a workforce equipped with the right skills. Malta excels in digitalization and is well-positioned to harness the benefits of AI. However, there are significant shortages of highly-skilled workers. While digital technologies, including AI, enhance productivity, they may also lead to job displacement. The focus should continue to be on improving educational outcomes, increasing STEM enrolment, enhancing digital skills and boosting adult learning uptake (for both Maltese and foreign workers.”
This reminded me of one of the main messages in the Draghi report on Europe’s competitiveness. Draghi made the point that “Europe’s position in the advanced technologies that will drive future growth is declining. Only four of the world’s top 50 tech companies are European and the EU’s global position in tech is deteriorating: from 2013 to 2023, its share of global tech revenues dropped from 22% to 18%, while the US share rose from 30% to 38%. Europe urgently needs to accelerate its rate of innovation both to maintain its manufacturing leadership and to develop new breakthrough technologies. Faster innovation will, in turn, help raise the EU’s productivity growth, leading to stronger growth in household incomes and stronger domestic demand. Europe still has an opportunity to change track. With the world now on the cusp of another digital revolution, triggered by the spread of artificial intelligence (AI), a window has opened for Europe to redress its failings in innovation and productivity”.
It is truly uncanny that what the IMF is telling Malta is really and truly what Draghi is telling Europe.
Which brings me to the last point. I was seeing that a Maltese company that has been operating for many years in the IT sector, is going for an IPO.
Normally Malta’s listed equities are mostly linked to banks or companies involved in property projects or backed by property investments. Hence, when I saw this new IPO I decided to read the prospectus.
I was positively surprised to read that this company has an in-house R&D function which is made of “specialised business and technical experts, including members with expertise in the application of artificial intelligence and machine-learning technologies”.
It was also interesting to discover that this company has developed a generative AI assistant for their ERP platform, whereby this will allow their customers to easily query their business data (such as accounting or CRM data) using natural language, with this concept having been validated with several customers.
Clearly, my remarks should not be interpreted as investment advice to purchase the equity offered in this IPO. I am not here to offer investment advice. But I must admit that it feels very refreshing that such a Maltese company has launched this IPO, to allow investors to invest in an area which Malta very much needs to grow in, if it is to improve its productivity output and become more competitive.