This is the second article in a two-part series. Read part one.
Investment in and the promotion of technology should not stop at an administrative level. On the other hand, the creation of a nation-wide infrastructure and eco-system that is attractive to technology developers, in particular those in innovative technology, should truly be at the forefront of Malta's targets. This is where Malta must seriously invest its resources and efforts over the next few years, whilst adopting a strategy that does not push agendas that could dent the image that the island would attempt to build through this new focus. In this regard, it may be time to rethink the practice of aggressively promoting the island on several fronts which may not be aligned with the overall strategy. This is not merely an exercise of tweaking the way we market our island's offerings, but thinking of reputational sustainability. We must ask which economic sectors are attuned to the reputation we wish to achieve and act accordingly.
Malta is lagging behind other EU Member States, not to mention the UK, in the promotion of the Tech sector and to make the giant strides it needs in order to catch up with the pack the Government needs to act fast, invest its resources properly and make sure that it does not trip in its own feet by promoting agendas and incentives that alienate and disrupt the good progress being made.
On the other hand, the Government must ride and build on its success stories and place itself at the starting blocks ready to sprint ahead before other jurisdictions. This is the case, for instance, of the technology regulator - the MDIA - which was a first of its kind. The EU Commission today is proposing an AI regulatory framework that centres around a certification system that resembles that administered by the MDIA under Maltese law since 2018. Similarly, the Government passed the legislation intended to regulate DLT beyond crypto assets, in 2018. It now needs to continue with such legislative efforts providing positive and clear solutions to questions of legal personality and liability, which legislation has been shelved despite having been painstakingly drafted over a two year period with the inputs from and consultation with the industry. This, too, was a first of its kind and intended to bring regulatory certainty to an area which is often shied away from as a result of its not being regulated. Since then other countries have moved on the same agenda and have enacted exactly that type of legislation.
Ultimately, industry players and investors would be seeking to eliminate or minimize the risks to their investments. A strategy should therefore seek to address these risks, which come in the form of regulatory and legislative uncertainty, bureaucracy and the lack of a supportive ecosystem.
Being able to offer holistic legislative and policy solutions that enable start-ups to experiment, build upon and upscale their ideas is a goal we must be dead set on achieving. This entails providing appropriate infrastructure, legislative tools to allow, not only for the protection, but more importantly for the commercialization of their ideas, a legislative and policy framework that attracts and leads private investors to direct their target audience to our shores, a workforce and University set up buzzing with talent, a migration system that facilitates the flow of talent in the digital industries to our shores and Government fiscal and financial incentives that embolden and encourage individuals and start-ups to invest their time, effort and resources in technology.
A framework that incentivizes growth is one that is investor-friendly and facilitates the maximum recovery of the investment made, in case of failure. Our laws should therefore facilitate the placing of the IP being generated in collateral as, very often, this is the only asset that the developer possesses. Forcing the developer to hypothecate his private property simply because the law does not cater for the creation of mortgages or pledges over intangible and unregistered copyright is not acceptable in today's world where the tech developer's work revolves around this form of IP which, of itself, has a high economic value. DLT-based registers of such rights allowing for the burdening and collateralization of the same rights should be high on Malta's agenda of legislative overhauls.
Bolstering a solid legal framework with packages of financial and fiscal aid in a clear and coherent manner and streamlined and simplified administrative procedures, through the use of technological solutions, will go the extra mile.
Finally, the Government should focus on big data, offering innovative incentives to industry players and developers in the form of data banks, in strict adherence to the highest standards of data protection laws, ethics and cyber security. This will shine a spotlight on Malta for AI and machine learning developers.
Any future project - or relaunch of existing projects - needs to start from the risks and the powerful technology which is clearly needed to deal with them. The time for action and strategic decisions is ripe. A deep focus on technology could well be what will project us from the current situation into the future as a competent, resilient and ultimately attractive jurisdiction.
This article was first published in the Times of Malta.
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