Malta has been positioning itself as one of the most progressive countries in Europe — if not the whole world — related to technological development. After passing what is often tagged as the “three landmark bills” in November last year, the country has become internationally renowned as the “blockchain island”. However, innovative progress in Malta is not only about distributed ledger technologies (DLTs); the government’s vision goes beyond that.

Very recently the island sent currents by announcing the possibility of turning into a zero-emission country, starting by planning a pilot of introducing an only electric vehicle zone in Gozo. Malta is also shooting for the moon with its latest vision of taking a giant leap into space. At the same time, this month means the public consultation about its recently-launched AI policy as the first step of establishing a national strategy. Such a tiny island, yet so much to do.

However, why bother with a public consultation? “We have the team, we have the brain, and we have the skills to come up with a national strategy, but since we understand that AI is a general-purpose technology — and like electricity, computers or the internet it will impact both the society and economy — we wanted to make sure it is inclusive and that nobody is left behind,” Mr Grixti tells BM in justification for turning to the public before establishing a strategy.

Hence, the Malta.AI Taskforce, an organisation assembled by the government to cater for setting up the AI environment in the country, very recently came out with an AI policy, and put it on the table of the public, opening the floor for input and feedback in the framework of public consultation.

Labour shortage increases challenges

Despite precautionary measures such as opening a public dialogue and securing a strong technical background and skillset, challenges can always arise, and Mr Grixti’s operations appear to be conscious about that. “I think one of the biggest challenges regarding AI progress in the country will be talent. Not because we don’t have high-level talent in Malta, because the talent we have is of a very high level, but rather the shortage of it,” Mr Grixti forecasts. Labour shortage has been an issue not only in Malta that boasts of rapid economic growth and plummeting unemployment figures, but also Europe-wide.

“Demand has been higher than the local supply. According to a Jobsplus [Malta’s national public employment service] report, last year — forecasting that given the GDP keeps growing at the current pace — approximately 10,000-13,000 jobs will be needed, while our local supply is about 3,000. There will be a labour shortage of around 7,000-10,000,” according to the AI task force chairman. Although the lack of skilled labour is an issue, the government seems to have an answer for tackling the difficulties.

“You can bring talent from abroad, but for that you need to create policy measures, to attract that talent. We are also investigating how to use AI to fill in certain gaps. Including upscaling and reskilling of the workforce, for example. So the main challenge I see in here is human resources and talent,” Mr Grixti underscores.

Finding niches at the forefront

Once the talent is fully working on the Maltese progress, Malta needs to David up and fight the Goliaths. The task force seems to have its strategy for that as well. “Another challenge, seeing ourselves, is competing with China and the United States in terms of AI. As we said at the launch, we are not positioning ourselves as the competitors of these countries on all fronts. We are working on finding our niches, and we believe we can be leaders in those niches,” Mr Grixti says, clearly signalling how Malta wants to join the giants at the forefront of this particular space of innovation.

“For instance, as we earlier said it, we would like to become the ‘Ultimate Launchpad for AI’, where we can create incentives, policies and the environment for companies — micro, SMEs and large enterprises — to set up shop in Malta, and let them build, test and implement their products in here and then springboard them to the world. I believe in this aspect we can be leaders,” the chairman adds. In fact, one of the main messages of the AI policy that hit the stalls recently is to set up a safe and welcoming environment on the lands of the archipelago for AI businesses and start-ups to come in here and develop their ideas into fully-functional products and services before they upscale them to international markets.

The so-called “three landmark bills” passed last year aspire to create a regulatory environment in Malta that does not only make it possible for tech businesses to develop their solutions here but can also be easily adjusted to further development if the latest changing trends increase the demand. “Last year, we enacted three laws, entitled the MDIA Act, ITAS Act and VFA Act” Mr Grixti reflects upon the progress.

Technology agnostic legal framework

“When we articulated the legal framework at the time, we were conscious that more emerging technologies would be coming forward. We then created a legal framework that is technology agnostic. If you look at the Innovative Technology Arrangements and Services Act, it is technology agnostic. In fact, we have come up with the term ‘innovative technology arrangement’ (ITA). Currently, these ITAs comprise of DLT platforms and smart contract solutions proposals that we are receiving, however, later we will expand this also to include AI,” the chief says.

At this point, the regulatory framework chiefly attracted the attention of blockchain-based solutions. While the blockchain, experts and developers claim, can go far beyond cryptocurrency-related solutions; still the vertical is mainly dominated by ventures trying to generate money through initial coin offerings (ICOs). With the quickly popping up ICOs, the number of scams has also been on the rise. Such a practice undermines trust in the digital space globally.

However, Maltese legislators appear to be aware of the dangers and step up proactively. “We have the foundations and building blocks to make sure that the projects that come here are sincere and will not scam investors. The current legal frameworks for virtual financial assets (VFA) and innovative technology arrangements (ITA), accompanied by the respective guidelines, provide legal certainty and user protection,” Mr Grixti says.

Framework for providing safety

“For example, when certifying an ITA, the first stage is due diligence of the people and businesses applying for the certification to ensure that they are fit and proper. The second stage is that we start looking at ITAs from a technological perspective. The authority has service providers — that are carefully selected — who carry out such audits. The auditors investigate three main aspects: management, security and functional correctness,” the chief describes the process.

“We want to protect users. One of our main objectives is to protect users,” Mr Grixti takes a firm stance on their operations. “Over and above that, once the certification is there, we have what we call a technical administrator (TA), who will ensure that the product — technology or software — runs with what we certified.”

“In case of any breach, the TAs must notify the authority and the users so duly measures can be taken; such as intervening if it is technically feasible. Any technical limitations are recorded black and white in the certificate, so we can keep the users up to date. This way, users have full control and knowledge over the matters,” the chairman winds up.

The post Malta ready to lead in AI amid challenges first appeared on The Malta Business Weekly.

Over 100 restaurateurs participated in PwC’s market research during Q4 2018. Some 48% of the participants talked about an increase in business as compared to 2017, in contrast to 23% who registered a decrease in activity and 29% who reported of stable commercial levels, PwC has found.

“The sentiment emanating from the barometer corresponds to an economic landscape that has experienced an increase in disposable income and a marked growth in population, that has also brought with it the challenges in terms of resources and infrastructure,” says David Valenzia, PwC Territory Senior Partner. “The evolving channels of customer interaction and demands is a further challenge that the industry needs to adapt to and invest in,” he adds.

Restaurants in the St Julian’s area reported a 76% increase in business, the southern part of Malta saw a rise of 63%, while the central area lagged behind with a growth of only 25%, figures by the PwC show.

Labour shortage casts shadows on market

The industry appears to have adopted a slightly more negative outlook recently. As compared to 2016, when 71% of the respondents talked about a positive outlook, in 2018 only 51% said they anticipated positive times approaching in the next half a year. However, outright pessimism was also on the decrease. While in 2016 some 18% held a negative outlook, in 2018 the ratio dropped to 16%, according to PwC.

Unsurprisingly, the sector voiced concern about finding an adequate supply of skilled resources in 2018, which is similar to what PwC found in 2016, even if figures appear to have been dropping. Out of the respondents, 35% identified the availability of skilled resources as their leading business concern in 2018, while in 2016, a significant 63% of the industry had identified human resources as the principal business concern.

PwC’s findings suggest that the drop of the aforementioned figure was chiefly due to the engagement of foreign nationals, although only 25% of the respondents think that the sole strategy of recruitment of foreign nationals should be pursued.

For fighting challenges posed by the shortage of skilled labour, 38% of the respondents said that the industry needs to come together and increase the financial package to its employees, with a view of making a career in hospitality more enticing, PwC says. A further 37% urges policymakers and educational and vocational institutions to position employment in the hospitality industry as a more attractive job opportunity.

An increasing emphasis on infrastructure accompanies the growing demand. Some 53% of the operators in the industry believe that the level of investment in not commensurate to the recent surge in tourists volumes. This sentiment, at 88%, is more acute through restauranteurs who operate in the south of Malta, PwC added.

The whole report including charts and visual representation of data is available for view at the official webpage of PwC Malta.

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