What We Think

June 22, 2020

Transitioning into the digital transformation

The enabling role of technology was always known however the COVID-19 pandemic has brought it at the core of our being and functioning. As companies moved to the cloud and remote working became the norm; AI and big data was used by health authorities; apps were designed to support social distancing and public health and technology is being seen as a key pillar of an economic revival strategy. Malta has been investing heavily over the past twenty-five years and the public sector has played a key role in the creation of a fully-fledged economic sector.

Today, the sector accounts for around 9 per cent of GDP and employs over 10,000 people. Not only does it constitute a sector in itself but more importantly it is a key enabler for other sectors including professional services, remote gaming and financial services. Going forward, Government needs to ensure that the digital sector does not only remain an enabler but truly becomes a core and central tenant of our society and economy.

Earlier last week, the European Commission published the Digital Economy and Society Index (DESI) for 2020. DESI is a composite index that summarises relevant indicators on Europe’s digital performance and tracks the evolution of EU Member States in digital competitiveness. Over the past year, all EU countries improved their digital performance. Finland, Sweden, Denmark and the Netherlands scored the highest ratings in DESI 2020 and are among the global leaders in digitalisation. These countries are followed by Malta, ranking 5th, Ireland and Estonia. DESI is a composite indicator that is based on five main pillars which look at connectivity, human capital, use of internet services, the integration of digital technology and digital public services.

Based on data prior to the pandemic, the country performs above the EU average in all the five dimensions of the index. Malta performs well on broadband connectivity. The country records good scores on human capital, especially because of the high share of ICT specialists and ICT graduates, while also the involvement of women in the digital sector is gradually increasing. More and more people in Malta use the internet and engage in a number of activities. Maltese businesses rank first on the use of big data, and the overall level of business digitisation is relatively high. The country’s performance in digital public services continues to be negatively affected by the low use of e-government services by the general public. Low progress on open data policies is another reason for Malta falling behind other EU Member States.

Malta is making good progress however there are a number of challenges that Government and stakeholders need to address. Malta’s attractiveness hinges on our capacity to continue improving and in our continuous transition to a digital society.

First; further develop and deepen the ecosystem. Economic sectors thrive on the coming together and well-functioning of all players and actors. Therefore, Government needs to ensure that there the ICT ecosystem is working well with access to finance, grants, accelerator programmes and ability to internationalise. The establishment of Tech.MT; which was highlighted by the DESI report, is a step in the right direction. Its focus on the ICT sector and the further development of the digital economy will undoubtedly benefit the local ecosystem.

Second, much has been achieved in terms of the availability of local talent. Numerous University programmes and specialisations have supported the growth of the sector. However, it is important for digital skill acquisition to start at much younger age. Malta continues to underperform in STEM education and our educational system needs to foster and nurture digital skills from a much younger age.

Third, eGovernment services have been a key achievement of the Maltese Government for decades. However, it is not only important for them to be available, but more emphasis needs to be made on their usage. It is here that Malta performs badly. Government should ensure that the electronic ID system is improved in order to make it more attractive to use. This needs to be seen together with other important initiatives which will enhance the use of such services including digital signatures. The public service is leading the way in digital transformation and Government agencies such as MFSA and MITA have and are fully embracing the digital transformation. More business reengineering processes need to be launched to ensure that the public and businesses use such services. The Parliamentary Secretariat for Financial Services and Digital Economy will play a key role in ensuring that the public service becomes digital to the core.

Fourth, digital society is about inclusivity and Government needs to ensure that everyone has access to digital tools and internet connectivity. Social inclusion can be heavily supported through the use of technology and our smallness should facilitate this.

Although the DESI results are encouraging and have highlighted significant progress, there is no room for complacency. We believe that digital transformation needs to be a central tenant of our recovery plan and national vision.

 

This article was published also on The Sunday Times.

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