Many countries round the globe are trying to carry out the paradigm shift to the digital economy. But what is this digital economy? The digital economy is the global network of economic and social activities that are enabled by platforms such as internet, mobile and sensor networks. The digital economy refers to the devices most of us use every day such as computers, phones and game consoles. It includes the online maps that we consult, the web searches that we make to find information and our electronic banking.

A successful digital economy is essential for any country’s growth and its ability to maintain its international standing. It offers new opportunities for businesses to a larger, potentially global, audience and for individuals to connect and collaborate.

The Maltese government recently launched a Digital Economy Strategy. Advancing Malta’s digital economy requires action by government, industry and the community and the key areas of focus for government, industry and the community in order to maximise the benefits of the digital economy for all Maltese are:

For the government:

·        To lay the foundations of Malta’s digital infrastructure

·        To facilitate innovation

·        To set a regulatory framework more conducive to the digital economy

For industry:

·        To demonstrate digital confidence and build digital skills

·        To adopt smart technology

·        To develop sustainable online content model

For the community:

· To enjoy digital confidence and digital media literacy skills

· To experience inclusive digital participation

·  To benefit through online engagement.

The digital economy is highly dynamic and, ultimately, it will encompass the entire economy and many, if not all, facets of our society. The digital economy presents Malta with a unique opportunity to shrink the isolation caused by being an island that has historically dominated our domestic and international relationships, opening up new markets for engagement and growth.

The role for the government

The government’s role is to fill the gap left by the market, address social inequity, protect the community, assist markets to work fairly and efficiently and address market failures.

However, the transformation of our economy into a digital economy is, appropriately, a market-led phenomenon. Consequently, the government’s primary role in developing the digital economy should be that of an enabler – enabling individuals, households and businesses to take up the opportunities the digital economy offers. In its role as enabler, the government should be building or facilitating the development of our digital infrastructure, facilitating innovation and setting a conducive regulatory framework. 

A thriving digital economy requires a world-class infrastructure that can adapt to support future demands. It is clear that bandwidth demands are increasing and to prepare for this, and cater for the applications and devices of the future, the government has to honour its commitment to develop Malta’s physical capacity both within Malta and Gozo and with the rest of the world to participate in the digital economy. These include the ambitious Fibre to the Home (FTTH) project across the country. Malta also needs good international connectivity to compete with the rest of world. The increase in the number of submarine cables from one to four in less than a decade has been a step in the right direction, but Malta now needs to be connected directly to the international superhighways to places such as Marseilles and Milan. 

Spectrum is also critical for the digital economy. The industry needs certainty to plan for and develop future services. The reallocation is also important for consumers and the competitiveness of the communications sector as a whole and will play an important role of the future of the digital economy. 

Networked digital technologies empower individuals, private companies and researchers to use and re-use government information in novel ways that can produce economic benefits and promote social wellbeing. For example, the combination of public sector information with mapping technology can also increase our understanding of important public policy issues such as health.

Malta does extremely well in the provision of e-government services. However, more can still be done to improve the online service delivery as well as encourage a greater take up of these services by Maltese citizens. 

It is also important that Malta has a strong digital innovation research and commercialisation base. Research and development, particularly in ICT, drives skills development and attracts investment, which can promote knowledge transfer. It can also increase Malta’s innovation capacity.

Regulatory structures are important for providing business certainty, addressing market failures and protecting the interests of consumers. If not carefully constructed, however, regulation can stifle innovation and investment, particularly in dynamic areas. The digitisation of commerce means that Maltese companies are increasingly competing directly with foreign businesses, even if those same businesses are based offshore and operating under different regulatory structures. Governments must continue to review regulatory structures as technology and markets evolve. Ongoing reviews allow these frameworks to continue to provide an environment in which businesses can grow and consumers can act with confidence.

The role for industry

Industry can contribute to Malta’s digital economy by growing its online presence and e-commerce facility. Industry can also provide relevant input on its skills requirements and promote the development of digital skills to ensure that high levels of professional expertise exists in Malta to support local digital economy companies and attract foreign investment.

Industry can contribute to Malta’s digital economy by demonstrating greater digital confidence. Businesses that are digitally confident are more likely to incorporate technology into their business process and enjoy the resulting improvements in productivity. 

Technology can assist Malta to better meet environmental challenges. For example, tools such as telemetry, satellite imagery and global positioning by satellites (GPS) help us understand changes to our environment. Teleworking and video-conferencing can reduce the need for travel and also provide for greater workforce flexibility.

Online content serves an important role in the digital economy in several aspects. Countries that lack a sustainable content industry risk lower levels of participation in the digital economy, a slower development of skills and a dilution of their cultural identity.

The role of the community

Malta’s digital strategy must be sensitive to the fact that not all community groups currently participate online equally. The potential for digital exclusion needs to be addressed in the design of online services and in the framing of social inclusion policies. Malta has achieved a great deal in the digital inclusion area in recent years with various projects ranging from learning centres, public Wi-Fi spots, subsidised refurbished PCs to financial support in broadband access. The fact remains that technology and social disadvantage are inextricably linked. This means that social policy goals will be increasingly difficult to realise as mainstream society continues to embrace changes in our information society while those on the margins are left further behind – disengaged digitally, economically and socially.

The government has to continue implementing initiatives to increase access to online services by all Maltese. Industry also has an important role to play in promoting digital inclusion. This includes incorporating accessibility into the design of ICT as well as programmes to promote and support access and skills development among otherwise digitally excluded groups.

Conclusion

The task of transforming Malta’s economy and society into a successful digital economy is a significant one that requires a long-term focus. In devising their strategies, both government and industry must recognise that this is a process which touches all aspects of our economy and society. Malta is not alone in realising the magnitude of this challenge. As the Organisation for Economic Cooperation and Development has stated: “ICT policies are now becoming less sector-specific and more a part of the mainstream economic policies that concern the economy and society as a whole. Countries with long term strategies for information societies typically emphasise the role of ICTs and the internet as key enablers of wider societal change.”

Philip Micallef is a former executive chairman of the Malta Communications Authority