WINDOW OF OPPORTUNITY

Cover story

29 Jun

Giselle Borg Olivier sat down with Dana Farrugia, chief executive officer at Tech.mt to learn about the relatively new entity – what has it been up to and where is it going?

Having been in operation since 2019, what is the vision of Tech.mt?

Tech.mt was established in the 2018 budget, but it started operating in 2019 and its main function was always to promote the national strategy for technology and innovation. This encompasses the whole technology sector which includes AI, blockchain, cloud software development, business analytics, robotics, quantum and all the works – so both the regulated and the unregulated side of technology.

Our main responsibility with regard to promoting national strategy is growth and stability in the sector. Malta has other sectors who have their promotional arm, like FinanceMalta for example, which promotes the finance sector, and GamingMalta does the same for the gaming industry, so when Hon. Silvio Schembri was responsible for this remit, he decided that technology deserved to have the same setup. That was our inception and we have been delving into strategic moves to identify the needs of the sector.

We always felt that it would be useless to dictate the strategy ourselves and try to implement it or force it upon a sector. We do not want to ignore the very important part our remit, which is, listening to what the sector wants.

Another important facet of Tech.mt is to include the student sector in our strategy; to meet the demand from the sector by creating more awareness. Also, since it's a very dynamic and innovative sector we want to hear from the generations who have been introduced to technology since birth, therefore their needs and the way they communicate is different to older generations. We want them to be included because they are the future backbone of this sector.

Technology is no longer a choice, but a fundamental business strategy that must be interwoven with wider operative initiatives. In a world after COVID-19, we will continue seeing technology playing a leading role in the reshaping of entire industries and generating efficiency gains. Our main commitment at Tech.mt lies in pointing technology companies in the right direction.

What hurdles have been encountered since its inception?

I would describe them as alignment issues rather than hurdles, that is, getting all the facets aligned. I would say that the major obstacle would be human perception when it comes to technology.

I’m talking about the technological adoption of innovation, the optimization of processes, digitalizing manual processes, and opting for out-of-the-box functionalities that will replace current manual processes – and not only by the technology sector. Statistically, in Malta we can see that the technology sector is far ahead when it comes to adopting new technologies and the other sectors are far behind. The major hurdle is a mentality issue – embracing the mindset of accepting the technology, promoting it, and adopting it. Technological adoption cannot be seen as an obstacle in itself. If there is the drive and the resources in place, then migrations from manual or semi manual to automation can easily happen.

Companies in different sectoral areas are still opting for manual processes, or for processes that they have been using for the past 10-20 years – processes with multiple systems, no integration, no exploring of new technologies.

Companies miss out on globalization when they do not keep up with new technologies; AI solutions can help them learn more about their customers which can help them with segmentation and targeting that can in turn reap more sales.

Why do you think companies are reticent to adopt new technologies?

Resistance can be for many reasons. Maybe it's the fear of the unknown. Maybe the people who are responsible for manual processes do not understand the benefits of technology. There has to be more awareness; that is what we are trying to do. We want to show what technology is offering today, like robotic solutions that can do a lot of the manual work once developed, and artificial intelligence solutions that can help with risk management and compliance. Moreover, these are cost-effective solutions because being specific and targeted when it comes to customers or processes hits a company’s bottom line positively.

In times of turbulence and uncertainty, it is important to remember the many positive ways in which technology is connecting people, educating children and entertaining families who are now forced to stay at home. COVID-19 may be the moment that brings remote work to the mainstream, supporting the fact that with the right technology and company culture, employees can be just as productive and effective from home.

“Thanks goes to our local technology sector, for exercising resilience during this pandemic
and being a backbone to other economic sectors”

What has been done in terms of attracting foreign start-ups and international companies to Malta?

During the six months that we’ve been operating we participated in multiple international events where we positioned Malta as the technological hub of choice. We were perceived very positively and we got multiple leads from these initiatives. We have also been in the media to make our presence known because we needed to establish our brand and identity, as well as getting the technology sector on board, which we are still working on.

We have been promoting the country during a time where it proved to be quite a feat; however, we continue to push both Malta’s reputation and the technology sector specifically at both local events and international ones. We’re also working with the private sector to help them overcome any obstacles that they may encounter, be they either bureaucratic obstacles locally, or assisting them in making contact with specific business opportunities abroad.

We have partnered with the European Enterprise Network to establish a process for companies where we can analyze their business plan and the markets that they are interested in internationally and give them advice about whether it is worthwhile to explore such markets.

With these leads, what have you found to be the greatest challenges?

Last year, unfortunately, our major hurdle was the state of the country’s reputation. People were more interested in what was happening in the country rather than whether we were successful or not, although our numbers spoke for themselves. Our economic performance was still exceeding expectations, the growth in the technology sector was very strong, and new companies were being set up. We are building on the momentum that we created last year, and it will reap its benefits this year.

It all boils down to budgets when it comes to promoting the island; however, the product is already good, and the government is working on mending certain teething problems. I am forseeing that this year there will be many success stories locally.

You’ve mentioned the local industry – what's being done to promote it both locally and internationally, and what are the challenges that the local IT industry is facing?

One of the major challenges is obviously human resources, followed by the extent of the Maltese technology industry when they come to bid for international tenders.

Even if you had to have a local consortium, when you are competing with the Googles and the IBMs and the Microsofts of this world, it’s likely a company will probably choose a reputable giant over a small consortium. But not everything is doom and gloom. We have many companies who have internationalized and are seeking offshore opportunities, especially from Africa – the African continent is a virgin continent for technology innovation.

We also have a very good relationship with the Asian continent, although at the moment everything is on hold because of the Coronavirus, but we are seen as a trusted European partner with Japan and China – we do a lot of business there, especially in Japan.

This year we have embarked on creating real-life case studies to show that you can make it in Malta in the technology sector. Malta is attractive for those investing in the technology sector and we have had both local and international people who came to Malta or started their business in Malta with a technological solution and have succeeded.

Covid-19 has made it evident that we must operate with zero dependencies, remove geographical barriers to trade and become global. If the customer is not coming to you, then your business needs to set presence in the customer’s life, digitally. Investing in digital technology today will become a most valuable digital asset in the near future

There is a diversification in the technology portfolio that is being offered because we attract very high-value talent; locally our education system produces high value talent when it comes to technology, and we also attract high value talent because of incentives that we offer when it comes to the salary taxation system. It also boils down to the potential that one is exposed to.

Tech.mt also acts as a go-to entity for companies, both local and international, to have a starting point in the industry.

In terms of the human resources issue, is it being actively tackled?

We are seeing a surge in remote working – therefore tapping into talent which is not physically here. I have also been working with a resources company that is finding talent pools who are rated to be reliable workers – technology can be a dark sector as you’re never sure who you are speaking to in terms of development, whether they are delivering what you are asking of them, or whether they left any intentional loopholes allowing someone to eventually hack into your system to steal data. We have relied on reputable local companies, when it comes to resources, to promote this remote working exercise.

With regard to the education system, both MCAST and the University of Malta have been working in tandem with us to enhance the education curricula when it comes to technology, because today we are seeing a lot of iterations when it comes to the digital economy, and the edcation system has been very responsive so that we produce what the industry is asking for.

***“Post COVID-19,***
***your business needs to set its presence in the customer’s life, digitally”***

So, the educational courses have been amended to reflect today’s requirements?

Yes, and another iteration that we were looking at last year and which is still in process is to enhance the process for visas. We were failing in the process when it comes to awarding visas to non-EU nationals because the process is more cumbersome. The checks have to be in place and obviously there has to be a legitimate process, but that needed to be optimized and there is an incentive that we are looking at to hopefully make it easier for resources from outside the EU to be available to Maltese companies.

The last report by the International Monetary Fund (IMF) has flagged that we are becoming very dependent on international workers. To be able to scale up, we are trending into the same grounds as Singapore, for example. We are of a smaller size, but we are going down the same route. We are dependent on imports because as a country we do not have any natural resources of our own, except for the human resource, and even that is scarce. So, of course if you want to scale you have to find resources.

That is why we are going towards this drive of system optimization and artificial intelligence, especially intelligent mechanisms, because some automated processes may replace some human resources and that human resource can then be used for something else. In tandem with this though, the private sector needs to understand that there needs to be an upskilling framework so that the human resource can be given additional tasks.

…to not end up with a situation of machine taking over man…

Exactly. So, in a world where we are seeing that we have a lack of resources, if you are going to shift and optimize certain processes, it is only natural to upskill that human resource to be able to use the person where you have gaps.

I'm sure that on-the-job training and upskilling is easier than trying to find someone from outside who is already graduated in that specific area and starting the training process from scratch. It takes time but it reaps more benefit, even when it comes to a company’s stickability and turnover.

Places like Estonia and Lithuania are considered successful in terms of technology. How do you see them in terms of a competitive jurisdiction?

When it comes to Estonia and Lithuania they have taken a different approach to ours, even when it comes to regulation and licensing of certain technologies. We have been more cautious and more quality focused rather than quantity. A license from Malta would be a trust certificate that the system that you claim to be developing will do what it claims to be doing. From a customer perspective that gives you a level of trust that you are using a platform that is authentic.

Other countries have focused on licensing and allowed companies and people to operate in their legislative framework, but that is more of a quantitative approach. Given what we're going through as a country, we did not want to go down that route, and that is why our framework is different. However, our framework has been looked at by both the French and the Germans because our technology legal framework is quite advanced when it comes to rigidness, righteousness and trust.

Pricing is another debate - when it comes to competition there is always an element of price - but you need to give your product value as well. That is something that we will be looking into this year; however, from a legislative framework point of view we do not want to budge.

If you're not technological yourself you may not realise that you may be using illegal software, therefore through our certification and legislation we are trying to achieve a high level of trust and to keep the reputation of the technology sector as clean as possible. So that is how Malta is different to other jurisdiction – when I see countries like France and Germany looking at our framework to establish their own, that gives me a lot of satisfaction.

What’s the next big project for Tech.mt for this year?

We will be continuing our past efforts to promote the technology sector both locally and abroad and to establish tangible relationships that can help Maltese businesses attract foreign investments to Malta.

Covid-19 has obviously affected certain plans and projects; however, we will strive to keep going, and thanks must go to our local technology sector, for exercising resilience during this pandemic and being a backbone to other economic sectors.