Author: George Mangion - Senior Partner, PKF Malta
Published on Business Today - 3 June 2021

It was October 2019. Then-Prime Minister Joseph Muscat gave a speech at the Delta summit and talked about his vision to regulate Artificial Intelligence (AI) and the internet of things (IOT) in an all-encompassing regulatory framework. He expressed hope that Malta would be served by a fast 5G wave band, which unfortunately only just reached us last month. With hindsight, millions were invested to place the island as the first EU member state to regulate blockchain and virtual financial assets.

Perhaps, ex-prime minister Muscat was overly ambitious about the potential return of business reaped from blockchain, yet his vision was extended to scale the next mountain of AI. Can tiny Malta act too big for its shoes when it tries to emulate the USA and China in the mad race to the bottom of the AI crucible?

Undoubtedly, it is a technology that tech giants pour billions of dollars annually into research and development. Really and truly, Malta ranks as the lowest contributor to research when this is worked as a percentage of GDP to R&D. Regardless of this handicap, the government is keen to be seen helping innovation and would like to see Malta becoming a jurisdiction that attracts talent from all over the world. 

Critics are not so sure – saying with the pandemic that wreaked havoc with international travel, we have to act contrite and perhaps start afresh late this year. Certainly, hubris was high in 2018, when we started to run yet reality caught up with us – as an infant, we had just learnt how to walk.

Is this a question of what we know about AI, we did not have time to learn? Still, no harm in blowing our trumpet particularly as seven EU countries in the south of Europe are still on the nursery slopes where it concerns AI regulation. Another AIBC Summit promoting AI is to be held locally next November. Previously, in 2019, AIBC Summit welcomed over 12,000 attendees from over 80 countries. This year, the AIBC summit will run in tangent with SiGMA’s gaming expo, offering tremendous opportunity for crossover investment. There was a formidable list of speakers to attract crowds.

It is encouraging to know how the government has spared no expense to promote such events to highlight the opportunities in Malta – dubbed the Blockchain Island yet the proof of the pudding is in the eating and so far Blockchain and cryptocurrency business have eluded us.

Malta was one of the first countries in the EU to regulate VFA services with a new state of the art law introduced in November 2018 with Moneybite being the pioneer company first licensed to provide various digital services including invoicing and payments to international suppliers and buying and selling cryptocurrency over-the-counter service.

The new VFA licence will also allow Moneybite to receive and process orders, custodian and nominee services. It will also authorise it to execute orders on behalf of account holders. Back in 2018, there was a wholehearted attempt by government agencies to spirit away in parliament new DLT legislation and ways how MDIA (main AI regulator) will license audit specialists in a concerted rush to lay the foundations for the sector. One cannot but admire pioneers like Eman Pulis – a firebrand who has successfully hosted mega Sigma events in tandem with AIBC in the past.

The gargantuan task to launch the island on the ephemeral heights of AI was championed by Silvio Schembri- a young economist recently appointed as minister for the economy and industry. His ambition is to open opportunities for Malta to gain from the wave of popularity that is gripping the ubiquitous sector of robotics. These will certainly have a profound impact on traditional manufacturing; for instance, our health sector is already making use of robotics to allocate medicines to patients and assist in useful operations taking place in the operating theatre.

Put simply, one may explain that this technology will in the near future spearhead novelties in the manufacturing sectors and create interesting scenarios in areas of productivity, safety, service, automated warehousing, transportation, land registration and police records.

As was the case of the internet revolution, some of the changes will happen in a gradual, evolutionary way; others will occur in a sudden, revolutionary manner. Apart from AI, there is its cousin – Machine Learning (ML), and its sibling – Deep Learning (DL). One may actually think they are all of the same stable but in fact, they are different. It goes without saying that the learning process involves feeding huge amounts of data to the algorithm and allowing the algorithm to adjust itself and improve.  For example, humans might tag pictures that have a cat in them versus those that do not.

Then, the algorithm tries to build a model that can accurately tag a picture as containing a cat or not as well as a human. In its simplicity, one may then conclude that once the accuracy level is high enough, the machine has now “learned” what a cat looks like.

PKF Malta has taken the initiative to launch a training lab called the bitpod concept. It is a non-profit organisation, intended to help connect entrepreneurs (mainly start-ups) to people, programming engineers, and other enthusiasts across the AI, blockchain and robotic fields. Whether you are looking to connect, learn, share, or work, Bit-Pod offers a selection of opportunities to network with other start-ups helping you scale the slippery slopes of early-stage development.

In conclusion, EU countries were given until April 2021 to submit their national recovery and resilience plans (RRP) setting out their reform and investment agendas until 2026, but some member states have thus far failed to do so. Malta’s own RRP is still in the embryonic stage so perhaps there is time to give priority to adequate funds to support research and development.

Author: George Mangion
Published on Business Today on 3 June 2021
Get in touch: info@pkfmalta.com