World Report

Malta is more than ready to become a regional hub for permanent ICT industry and services

ICT is present in all areas: in business, government, private homes and in the education sector.

alta is going through what is traditionally called the “second phase” of industrialisation. From the late 60s to the late 80s, the country operated as a low cost, low end, high-volume manufacturing base. By the mid-80s, heavy competition in this type of industry from areas such as North Africa, the Far East and China, followed by Croatia and Turkey, meant it was no longer profitable. Government policies were therefore redirected towards encouraging higher, more enhanced industry. “Today we are only targeting higher value-added manufacturing enterprises,” says Austin Gatt, Minister of Investment, Industry and Information Technology (IIIT).
“The more advanced the country becomes economically, the less it will depend on low level, high-end manufacturing. It’s important for our industrial sector that we boost pharmaceuticals, electronics, aircraft repair and the like,” continues the minister.

Mr Gatt sees the government’s role as paving the way to the new markets, and masterminding the leap from the old type of economy to the new one, in line with the Lisbon Agenda. Substantial investment is needed to train people to meet the challenge, as well as changing cultural perceptions and attitudes. With a strong focus on training and ICT access for all and under a policy to reduce the digital divide, the transition is taking place. One key element for the success of this strategy is that the economy has been able to absorb the number of redundancies in the low-end manufacturing industry, slowly integrating them into new sectors.

Malta already has one of the highest levels in the world of ICT penetration, not just at business levels but in schools, local councils, private homes and other segments of everyday life. Furthermore, the government has a very clear policy regarding investment in ICT areas. “Six years ago we set up an ICT policy, in which we outlined the aim of making Malta a centre of excellence in the Mediterranean. I believe we have hit all the targets,” states the minister. Averages for ICT exports and in areas of investment and ICT innovation are twice as high as other EU averages for the same area.

Austin Gatt
Minister of Investment, Industry and IT

‘We aim to leverage our success to create a permanent ICT industry in Malta’

“What we want to do now is leverage this kind of success into creating a permanent ICT industry in Malta,” says Mr Gatt. As well as focusing on software development and ICT engineering, the idea is to encompass telecoms and media, and expand further into warehousing of ICT products, as well as the back office and financial operations of ICT companies.

Ideally, Malta would become a regional hub for ICT industry and services, integrating the major companies and offering them a platform from which they can operate throughout the Mediterranean. The country is ready, says Mr Gatt. “What we need to do now is to create a durable base where Malta becomes recognised as the place to be for ICT in the Mediterranean.”

An important ICT project is currently on the government drawing board: the creation of a new Media Smart City in Malta, based on models developed by the Dubai company Tecom Investments. Over an eight-year period, the new SmartCity@Malta is projected to create 5,600 new jobs, around 65 per cent of which will be in Malta’s knowledge industry. The government has agreed to invest the land into the project whilst Tecom is expected to undertake an investment of approximately $300 million (£171 billion).

“I think the service industry is where we have really succeeded. If we continue successfully investing in education as we have been doing, this will ensure that our population, although small, will have the most skilled and knowledgeable people,” says Mr Gatt.