The Malta Independent 22 August 2019, Thursday

Innovation: status quo not an option

Philip Micallef Sunday, 3 February 2019, 10:05 Last update: about 8 months ago

When it comes to innovation, there is no such thing as a status quo - you either improve or decline relative to everyone else, and sitting in a comfort zone for too long could prove costly.

Relatively small countries like Israel and Singapore may not be on par with Silicon Valley, widely considered the heart of global innovation, but have been punching above their weight for decades now. Unfortunately, the same cannot be said of Malta so far.


The small city-state of Singapore was ranked by Cornell University, INSEAD and the World Intellectual Property Organization as the sixth most innovative country in the world, behind the likes of the United Kingdom and the United States - countries much bigger, and with more resources than the city-state. Singapore like many ex colonies had to face some huge problems: long term potable water supply, food security, affordable housing, infrastructure and talent acquisition among others. Today, with one of the highest global standards of living, the urgency to innovate may not appear to be as high at first glance.

Singapore thinks otherwise as it does not believe in the status quo: a country is always improving or it is declining.

Becoming an innovation hub like Singapore is an ambition for many cities because it attracts investment and talent. Israel believes that there are three parameters - culture, ecosystem, and the urban environment - that work together to make a successful innovation hub. One has to reach outside the boundaries of the supporters of innovation by holding meetups, hackathons and industry conferences to help people expand their network within an ecosystem.

Because of globalization, innovators can move around more freely and places need to offer a comfortable standard of living to attract or retain talented individuals. This is the reason why the recent survey among expatriates on the quality of life in Malta needs to be taken very seriously and not brushed aside.

While many cities can attract talent and build an ecosystem of entrepreneurs, investors, corporations and research institutes, experts say that many lag in the culture of risk taking.

The challenge is convincing people at every level to buy into an innovative idea, where not all the variables are known from the start. Winning over sceptics can be difficult at times.

A country's leadership in innovation appears to understand the necessity to constantly innovate and take risks. This involves investing in human and financial resources. In 2017, Singapore committed US$13.6 billion to support research and development for five years. Last year it also announced US$100 million to be invested in local efforts in artificial intelligence over the next five years.

Several areas need to be looked at to help a country become an innovation hub and a smart country. Singapore, for example, is looking at how technology will disrupt various sectors and the new opportunities created in the areas of finance, retail, restaurants, manufacturing, keeping a steady pool for the ICT sector, investing in building more infrastructure and making regulations not only pro-business but also pro-innovation and ensuring sustainability.

Regulatory sandboxes

A concept I firmly believe in is that of regulatory sandboxes (a term originating from a shallow box filled with sand where children can play safely and later used in computing to mean a virtual space where untested software can be run securely) in which particular solutions can be trialled. Malta Communications Authority had started this concept way back in 2010 with test and trial licences for spectrum and few are aware that the first such licence was granted to an airline to test Wi-Fi on board aircraft. 

Regulatory sandboxes cushion against failures while allowing a certain degree of risk taking. Singapore is the country which introduced this concept on a grand scale. Singapore understands that risk taking and leaping into the unknown are part of innovation, but it has played smart, from the regulatory perspective, to ensure risks are controlled before making a particular solution or process mainstream

Singapore has introduced the "Data Sandbox Programme" for companies and agencies to exchange and analyse big data. The Monetary Authorities in various small countries set up a regulatory sandbox which allows fintech players to experiment with new financial products and services in a controlled environment.

There is no recipe or handbook for arriving at the cutting edge of innovation. There are no precedents or useful examples. One has to try, experiment, start small, start fast and if one fails, fail fast. One has to learn those lessons and apply them again.


Ing. Micallef is a former CEO of Air Malta, Malta Communications Authority, Bermuda Regulatory Authority, Melita Cable, Malta Enterprise and various senior management positions with Orange France Telecom and Olivetti. He is now a member of the Innovation Club of Geneva, a global virtual curated innovation ecosystem, a network of stakeholders from the travel industry, start-ups, technical and service providers, academics, thought leaders and venture capitalists.

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