“Malta’s tech industry is not made up of many companies – there aren’t the kind of big numbers we see in other sectors, but it contributes to almost nine per cent of Malta’s GDP,” said Dana Farrugia, CEO of Tech.mt, on the latest episode of The Boardroom.
Ms Farrugia asserts that, especially in 2019, there was a spike in the contribution of the tech sector to the local economy, and although the momentum gained was impacted by the COVID-19 pandemic, Tech.mt saw an increase in the demand for digital services over the past six months.
“When the pandemic hit Malta, we saw a physical change in the way we live and operate as businesses, and we saw a change in demand, from a location point of view, for technological services, such as internet, WiFi and 3G, as people were moving their work location. Luckily, we have a robust physical infrastructure in Malta, where 99 per cent of our island is enabled with high-speed internet and an upgraded network – therefore, on this front, we could sustain the hit,” says Ms Farrugia.
Despite the many hurdles that businesses encountered over the past months, Ms Farrugia is confident that “our island is geared to handle innovation."
“Government has a Research & Development (R&D) budget, businesses also invest in R&D, and we have physical spaces available for ideas to be generated and tested,” she asserts.
“Something we need to see more of is partnership between the private sector and Government when it comes to business expenditure on R&D. As we know, not all ideas make financial sense, so there’s a lot of investment involved at a risk. The private sector might have a budget and limited resources and Government has another budget, so on this front, I think we should streamline efforts more.”
Speaking about the impact of COVID-19 on the technology sector, Ms Farrugia states that it has been affected long term and indirectly by changes to consumer behaviour. “Overnight, people had to revert to the digital world, and those who were not connected ended up disconnected from the whole world,” she states. “To businesses this meant a huge loss as those who weren’t geared up to work online struggled. Tech.mt is offering assistance through incentives, especially for SMEs, to gear up their services for the digital world.”
In the long run, this change in mindset for businesses to migrate online will help the digital sector to upsell. “This isn’t something that happens often in the tech world – Technology is very good at delivering and developing solutions, but then falls short on the commercial side. We need to up this further, so that consumers know what services are available for them to use.”
For business owners, this is also a good time to invest in upskilling its workforce and employing people looking for work who are eager to learn, by investing in and training their digital skills. “This is something we are discussing with businesses in the sector,” says Ms Farrugia, along with the urgent need to find and attract talent, to supply much needed demand.
Over the next 12 months, Ms Farrugia believes that the pace of growth will be slow, and regeneration will likely not pick up before Q2 and Q3 of 2021. “I think we are going to see people and companies collaborating more than competing; which offers potential for companies that are doing well to consider merging or taking over ones who wouldn’t survive otherwise. These are the rules of economics given how the sectors are performing globally.”
Since its inception two years ago, Tech.mt – which is a partnership established between Government and the Malta Chamber of Commerce with the sole purpose of helping the technology industry grow locally and internationally – has been focusing on its four pillars: promoting the technology sector, scouting innovation, encouraging talent and assisting the sector in whatever it may need.
“Tech.mt exists today because Government felt that the technology sector merited the same exposure as other sectors that have a regulator and promotional arm. We are regulated by the Malta Digital Innovation Authority, and we are responsible for all aspects of the technology sector, such as cloud services, business analytics, software development, robotics, hardware – we are here to put Malta on the global map and give technology the importance it deserves,” says Ms Farrugia.