Raising Malta's Profile As A Centre For Innovation

Marie-Claire Grima - 20th August 2017

How does Malta have to change in order to become a hub for new inventions?

PKF Malta held its first ever ‘Blueprint for Innovation’ session on 28th June, with the aim of raising Malta’s profile as a research, development and innovation centre, following a visit by a PKF delegation to the Massachusetts Institute of Technology (MIT) to explore links to promote Malta as a potential business accelerator and/or Life Sciences hub for innovators, inventors and entrepreneurs. The session featured two blue-chip keynote speakers from Silicon Valley and Boston, USA. The first was Stas Gayshan, CEO and founder of Cambridge Innovation Centre (CIC) within MIT University Boston. CIC is an innovation hub which has managed to attract world class start-ups, which have proven to be very beneficial for the US economy through the generation of premium jobs and its high value-added inventions.  The second speaker, Gor Sargsyan, is the CEO and founder of an enterprise called QBIT Logic, specialising in quantum computing research.

“What we know about innovation today is that it happens at the intersection of interesting people and ideas, as well as the resources that can support them,” Mr Gayshan says. “The challenge for Malta is not ‘can we make innovation happen?’ but ‘can we make it stay?’ Unless resources are appropriately handled, Malta’s bright and talented people will soon find themselves on a plane going elsewhere.”

The role of the CIC is to help entrepreneurs scale their ideas, allowing them to take their projects to the world, and Mr Gayshan is curious about whether Malta can become part of CIC’s global network. “We want to help each city’s innovation ecosystem become stronger – the bigger and stronger the ecosystem is, the better it is for the world. We don’t know what the next big thing is going to be – it is building it that is the next challenge. What we want to do is stake a lot of bets, and work to make as many of the efforts as possible successful.”

Stas Gayshan - Photo by Alan Carville

A company’s success or failure depends on many factors, including the inherent nature and services that the company provides, as well as the market it is operating in. “If you’re running the world’s smartest coal-mining company in 2017, it doesn’t matter how well you run it because you’re operating in an ever-shrinking market,” Mr Gayshan says. “Companies that do well are the ones that are successful at re-inventing themselves. Look at Blackberry. It was one of the first smartphone companies and ten years ago, everyone had one. Look at who dominates the market nowadays – it’s Android and Apple; Blackberry failed to keep up and nowadays their stocks aren’t worth the paper they’re printed on. Look at Facebook – back in 2005, the question was whether it would ever be as big as Myspace! Except the people at Facebook, unlike those at Myspace, understood how people were using their social network and even anticipated their needs. A failure to understand how people are using your product and to adapt to the changes within the industry will sink your company.”

Understanding and improving your product offering requires R&D investment, and for an aspiring innovation centre, Malta lags far behind in terms of the budget it spends on R&D. To Mr Gayshan, this certainly has to change – but it’s not a death sentence. “The genesis of Malta’s innovation problem is that its GDP has grown a lot but the innovation side hasn’t caught up yet. It’s a problem every country would like to have! That said, I strongly believe that innovation is the future of the economy. There’s a constant hunger for problem-solving but you don’t get there without spending money. Malta’s tourist economy will stay, as well other sectors of the economy, but to actually participate in building the future, you need to fund new research, ventures, projects and ideas.”

“What we have learned in the US is that the bulk of new jobs come from new companies, companies which didn’t even exist five years ago. The best way to secure the future is to invest in the new – it’s just that you don’t always know what the new is. Some things will work, others won’t – there’s a high chance of failure, but the rewards are great. The big question is not whether innovation will be our future but what innovation that will be, and how much of a part does Malta want to play in that.”

Meanwhile, in Mr Sargsyan’s home country of Armenia, encouraging and funding innovation has resulted in major rewards for the economy – 5 per cent of the country’s GDP is now generated by start-ups. “We’ve discussed with PKF what they’re trying to do in Malta, and because of the success we’ve had in Armenia, we’d like to share our experience and vision, connect talented people with key people from Silicon Valley and other international tech hubs. Who knows – maybe one of the next big innovators could be from Malta!”

Gor Sargsyan

Like Mr Gayshan, Mr Sargsyan believes that innovation can come from everywhere, but also that it needs a steady hand to guide it in order to flourish. “It’s a competitive world, and an idea needs different resources in order to grow beyond a thought. If someone is an innovator, they’re not necessarily a good businessman. They need someone to guide them and deliver their idea to completion. If you don’t support and protect growth, an idea can easily be stolen and taken away.”

“What we can do is provide some direction on what kind of research they can do. R&D has to be carefully directed so that the research can then be used productively, be it for existing companies or to launch new start-ups. We can mentor ambitious young entrepreneurs, connect them to investors, venture partners, and give them recommendations on how to move forward.”

Mr Sargsyan’s specialty areas are artificial intelligence and machine-learning – working with quantum computing in order to solve problems faster. “When working with a software company, almost half of the budget is spent on finding and fixing problems in the software – debugging. What we are doing is creating software that will automatically find and fix the problem. The technology learns by itself what the best solutions are, how to solve a problem in the most efficient way; it also suggests solutions. A team of 100 programmers can find and fix the problem in six months – our programme can do it in 20 minutes.”

“Technology is moving in the direction of artificial intelligence and machine-learning – it’s a kind of new wave. In the future, lots of things will be automated. This is another reason why it’s so important for Malta to encourage, develop and nurture an entrepreneurial culture, building new things and finding creative solutions. When you have these resources at your disposal, the potential is unlimited.”


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