As Malta continues to diversify its economy, and as we look at the woes and successes of countries near and far, it becomes more and more obvious that for economic growth and sustainability, too much reliance on one sector is never the wisest of strategies. And as much as the services sectors continue to serve economies well, and take countries up the value chain, these too need to be counterweighed by a productive industry, which creates wealth through production and innovation rather than servicing.
The only resources software development requires are brains and some development tools
Malta has traditionally had a good mix of manufacturing, with a natural move in the latter years, towards higher value production. Although having various logistical factors weighing against it, Malta has managed to retain a fair amount of activity in this sector with long-standing FDI set-ups showing that we can be competitive in various manufacturing verticals.
One area of “manufacturing” that lends itself naturally to Malta, and which also has been growing in these last years, is software development. The only resources software development requires are brains and some development tools. No need for any raw material to be shipped in or product to be shipped out. No need for large factory spaces. No pollution issues and no high carbon footprints.
Software development allows for a new “productive” sector that creates intellectual property and can have a high value add. Over the past years, realisation by respective governments of how important an element this could be, has seen a number of incentives, mainly related to tax credits being made available under the Business Promotion Act to software development firms.
This would have contributed somewhat to some foreign software developers setting up shop in Malta, and to a number of local software companies continuing to grow, to not only service the local market with their products, but to also take these beyond our shores.
It is now time to take stock of the situation and plot a way forward, if we want to continue to grow this sector. The Malta Chamber’s ICT Business Section has commissioned a State of the ICT Industry report to be compiled to provide a more scientific view of where we stand today. This will allow us to plot the future in a more informed manner.
There is no doubt that a successful software development sector requires a complete ecosystem to exist around it to support it and help it flourish and grow. There are various aspects which one needs to consider in this analysis.
What are the factors that would continue to attract software development companies to Malta? How can we make Malta a top software development jurisdiction? Why have software development firms come to Malta, and what has kept them here?
How have a number of locally-grown companies managed to break through with software products into the international markets? What has led to companies like GFI, Megabyte, Computime, Ascent, Shireburn and others to have success outside of Malta and what can we learn from their experiences?
What legislative innovations, apart from the normal tax incentives, can we be looking at to make the development of software in Malta more attractive than in other jurisdictions? Are there parallels to the legislative frameworks we developed which have made financial services, online gaming and pharmaceutical manufacturing attractive propositions?
What programmes can we put in place to help young creative developers to join and be successful in a world of cloud computers and apps? What start-up and entrepreneurial support can we give this crowd to be able to take their potential to a next level?
How do we produce the right quality and quantity of the resources required to make this happen? What is the profile for this resource? What local infrastructure in terms of communications, office space and ICT servicing do we require to sustain this growth? How do we position ourselves on the international scene as a leader in software development and related technologies?
Over the last years, the industry has been working to have some of these questions answered and to find a way to move forward in getting all the stakeholders together to formulate a clear plan moving forward.
We have been proposing the setting up of ICT Malta, in a fashion similar to Finance Malta, led by the industry and bringing together all the stakeholders, with the aim of plotting a vision and a series of initiatives required to reach set objectives. We look forward to being able to turn this into a reality and hope that all the parties who have an interest in this, support us on this initiative.
Keith Fearne is chairman of the ICT Business Section of the Chamber of Commerce, Enterprise and Industry.