Situational Analysis – Malta Digitali

Situational
Analysis

The Global Context

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The Maltese digital landscape cannot be explored without first gaining an overall view of the diverse and global political, economic, social, technological and environmental forces that come into play on an international scale, as shown in Fig. 1.

As indicated, major economic, social and environmental challenges could bring about
adverse and disruptive phenomena, globally and locally. In this context, digital transformation could serve as one of the ways of addressing such issues, providing potential positive outcomes for the diverse social and economic actors in both the local and global arenas.

The Maltese Digital Economy

Digital has, indeed, ingrained itself as a core element within Malta’s social and economic structure, providing a myriad of solutions for Government, business and society, and a strong base for economic growth.

Malta’s digital social and business interactions have maintained an upward trend, facilitated by further growth in broadband penetration, mobile telephony and
data consumption1 in recent years.

Furthermore, Government has kept up leadership momentum in digital public service provision.

Local research conducted in 2020 indicated positively evolving consumption patterns utilising eCommerce, particularly during the recent global disruption due to COVID-19. This included a 2% increase in internet usage, as well as an increase of up to 82% (from a previous 59%) of

users accessing the internet via mobile telephony. The study also indicated a trend among those aged between 18 and 54 of intensified smartphone use while conducting internet banking and effecting payments.

The Information and Communications Technology (ICT) sector has grown to represent around 7% of the gross value added (GVA) generated by the local economy and to approximately 3.5% of total employment. However, the digital economy’s real contribution is significantly larger when one considers the indirect and induced effects, as well as the central role digital technologies play in enabling other major economic activities.
The fundamental shifts in the structure of the Maltese economy in recent years, along with various changes brought about by the global forces highlighted earlier, are likely to amplify the already-present capacity for additional digital economy growth and employment.

Within this context, further focus must be placed on digital skills. Even though Malta’s tertiary graduation rate has increased steadily and caught up with the EU average (40.2% of the population aged 25 to 34 years in 20197), STEM-related subjects account for fewer than 20% of graduates. According to estimates from the European Centre for the Development of Vocational Training (CEDEFOP), around 70% of the Maltese population aged 25 to 64 would benefit from upskilling and reskilling since they are at risk of skill loss or obsolescence because of current shortfalls in educational

attainment levels, computer and digital skills, and cognitive skills.
Therefore, preparing all Individuals and organisations for the skilling opportunities that come with a digital economy is one of Malta Diġitali’s strategic priorities.
It is also key to give due consideration to EU strategies and programmes from which Malta is benefitting, such as Digital Single Market, Digital Europe, and
the Horizon Europe programme, which is making €100 billion available in funds for investment in R&I across the EU. In addition, Malta has also been allocated grants under the EC’s Recovery and Resilience Facility (RRF) as part of the NextGenerationEU instrument, which aims to support digital transition while enabling economic recovery in light of the recent global health and economic challenges.
Hence, the alignment of Malta Diġitali’s initiatives with such strategies and programmes is crucial to increasing the likelihood of success.
Finally, a look into Malta’s digital performance relative to other countries would also help identify where further digital strategic focus is necessary. The EC’s Digital Economy and Society Index (DESI) is one tool that would facilitate such an assessment. It is a composite index that regularly gathers digital performance and competitiveness measures in terms of connectivity; human capital; use of the internet; and the integration of digital technology and digital public services. The DESI measure for 2022 ranked Malta in sixth place relative to other EU Member States; the performance details of which are shown in Fig. 2.