In­no­va­tion: ma­noeu­vring the slip­pery slope

Malta Independent - - BUSINESS & FINANCE -

Mr Man­gion is a se­nior part­ner of PKF an au­dit and con­sul­tancy firm, and has over 30 years ex­pe­ri­ence in ac­count­ing, tax­a­tion, fi­nan­cial and con­sul­tancy ser­vices. He can be con­tacted at gmm@pkf­ or on +356 21493041.

As a small coun­try, it is no sur­prise that we are rather low in the peck­ing or­der in re­la­tion to pri­or­ity tech­nolo­gies such as ro­bot­ics, nan­otech­nol­ogy and biotech­nol­ogy. It is all very well that we pride our­selves on hav­ing one of the old­est uni­ver­si­ties in south­ern Europe and that we pro­vide free and fully sub­si­dized ed­u­ca­tion up to and be­yond ter­tiary lev­els, but we never built a solid bridge link­ing the aca­demic world to in­dus­try. In essence, it is all about cre­at­ing jobs and eco­nomic growth to keep up with the com­pe­ti­tion from other coun­tries which con­tin­u­ously strive to stay ahead of the game.

A case in point is the com­mer­cial po­si­tion of phar­ma­ceu­ti­cal com­pa­nies in Malta which so far pro­duce generic drugs and mostly do their R&D else­where. Only this week, Teva (pre­vi­ously Ac­tavis – pro­ducer of generic drugs), as a re­sult of its Euro­pean re­struc­tur­ing, will be lay­ing off one-third of its work­ers in­clud­ing a num­ber of ex­pe­ri­enced op­er­a­tors such as lab an­a­lysts, IT ex­perts and hu­man re­sources among oth­ers. In con­trast, UK Prime Min­is­ter Theresa May last week pledged to com­mit a £2 bil­lion an­nual fund by 2020 for sci­en­tific re­search and devel­op­ment and pro­posed a re­view of tax in­cen­tives for in­no­va­tive cor­po­ra­tions in an ef­fort to boost the lev­els of tech­nol­ogy in in­dus­try. The race to at­tract qual­ity tech­nol­ogy com­pa­nies is a tough one.

The pre­vi­ous ad­min­is­tra­tion worked very hard to build an ICT city and gen­er­ate a nexus of ex­cel­lence. In Fe­bru­ary 2006, the Gov­ern­ment of Malta an­nounced the start of frame­work dis­cus­sions with Te­com In­vest­ments of Dubai to set up ‘SmartCity@Malta’. This won­der­ful project was the brain­child of Austin Gatt, then Min­is­ter for In­vest­ment, In­dus­try and In­for­ma­tion Tech­nol­ogy who vi­su­al­ized the project be­com­ing a cen­tre of knowl­edge­based jobs in Malta. It was de­signed to place Malta on the global ICT map as a leader cre­at­ing thou­sands of jobs – part of the drive to re­gen­er­ate the south into a ser­vices-based hub in the Mediter­ranean re­gion. Due to the se­vere re­ces­sion that hit the global mar­kets in 2007/8, the project was scaled down sub­stan­tially.

As part of its cor­po­rate so­cial re­spon­si­bil­ity, PKF Malta is keen to act as in­ter­locu­tor to help pro­mote Malta in the field of sci­en­tific re­search, which is why, through the in­ter­ven­tion and as­sis­tance of its cor­re­spon­dents in Bos­ton, it started ex­ploratory talks with the head of in­ter­na­tional re­la­tions at Mas­sachusetts In­sti­tute of Tech­nol­ogy (MIT) in Bos­ton, USA to eval­u­ate the pos­si­bil­ity of in­tro­duc­ing Malta as a po­ten­tial ICT and/or Life Sciences hub for in­vestors, in­ven­tors and en­trepreneurs. Such a visit was un­der­taken and found co-op­er­a­tion from the New York tech­ni­cal rep­re­sen­ta­tive of Malta En­ter­prise –each party paid its own ex­penses

The Mas­sachusetts In­sti­tute of Tech­nol­ogy (MIT) is a pri­vate re­search univer­sity in Cam­bridge, USA founded in 1861 in re­sponse to the in­creas­ing in­dus­tri­al­iza­tion of the United States. Its bud­get for last year ex­ceeded $700 mil­lion and is cur­rently in the process of build­ing a mas­sive ex­ten­sion to house its nan­otech­nol­ogy re­search. The unique­ness of MIT is its ap­petite for prob­lems solv­ing – es­pe­cially those in­tractable, tech­ni­cal prob­lems whose so­lu­tions make a per­ma­nent dif­fer­ence. With its sup­port­ive cam­pus en­vi­ron­ment, it houses an in­cred­i­ble range of stu­dent groups com­ing from the four cor­ners of the world and thanks to its di­ver­sity and cre­ative at­mos­phere, its grad­u­ates flour­ish in all fac­ul­ties. It is no stranger to ac­co­lades and is rated the world’s best univer­sity in chem­istry; eco­nomics; lin­guis­tics; ma­te­ri­als sciences; nan­otech­nol­ogy and astron­omy.

This im­pres­sive learn­ing in­sti­tu­tion is the pride of the Amer­i­can in­tel­li­gentsia and other de­vel­oped coun­tries such as Sin­ga­pore have reg­u­larly in­vested in its suc­cess since the six­ties to par­take of its over­flow­ing chal­ice of in­no­va­tion and cut­ting-edge re­search.

An­other in­ter­est­ing land­mark is the Bos­ton-based Com­mu­nity In­no­va­tion Cen­ter (CIC) founded in 1999 and lo­cated in Ken­dall Square. This houses more than 1000 com­pa­nies in close to 50,000 square me­tres of premium of­fice and co-work­ing space across eight fa­cil­i­ties, in­clud­ing its most re­cent ex­pan­sion in St. Louis, Mis­souri. A num­ber of lo­cal high-pro­file com­pa­nies (in­clud­ing top names such as Face­book and Ama­zon) know their bap­tism at CIC – in­clud­ing its HubSpot, which now em­ploys over 1,100 peo­ple, and raised $125 mil­lion through its IPO last Oc­to­ber, and Great­point En­ergy, which sev­eral years ago an­nounced a $1.25 bil­lion deal to build re­ac­tors in China. Ad­di­tion­ally, An­droid co­founder Rich Miner built his por­tion of Google An­droid and es­tab­lished Google’s New England head­quar­ters there.

CIC also has a non-profit sis­ter or­ga­ni­za­tion – the Ven­ture Cafe Foun­da­tion. What is so spe­cial about CIC? The an­swer is that as an in­no­va­tion cen­tre it has suc­ceeded to at­tract world class start-ups which proved very sup­port­ive for the Bos­ton econ­omy through the gen­er­a­tion of premium jobs en­riched with high value-added re­search in an im­pres­sive range of sci­en­tific sec­tors.

Hav­ing toured its of­fices and lab­o­ra­to­ries, we were im­pressed by the num­ber of ded­i­cated en­trepreneurs who work hard to pur­sue the prover­bial Al­chemist Stone. Its founder is in the fi­nal stages of open­ing a new start-up hub in Rot­ter­dam, The Nether­lands – the first of its kind out­side the US. The Cen­tre will house 550 in­no­va­tive com­pa­nies and build on CIC’s in­ter­na­tional com­mu­nity of en­trepreneurs, in­vestors, and es­tab­lished busi­nesses. Rot­ter­dam was se­lected as an ideal lo­ca­tion, and was cho­sen af­ter an­a­lytic stud­ies re­vealed it is a very cen­tral city just one hour flight south of Am­s­ter­dam, a “foot­step” away from the Bel­gium bor­der and re­ally close to other Euro­pean hubs like Lon­don, Paris or Cologne. The Dutch pop­u­la­tion is flu­ent in English and Rot­ter­dam prides it­self on be­ing a melt­ing pot of dif­fer­ent cul­tures. The am­bi­tion of Tim Rowe, the founder of CIC is to bridge con­ti­nents and fuse in­no­va­tion in Europe.

It goes with­out say­ing that the am­bi­tious idea of an ICT In­no­va­tion Cen­tre in Smart City, which as stated ear­lier was a pipe dream 10 years ago, can with some imag­i­na­tion and po­lit­i­cal will be­come a re­al­ity. This can be a com­ple­men­tary move to strengthen the op­er­a­tion of an im­pres­sive Life Sciences block re­cently opened – now with a re­spectable num­ber of qual­ity ten­ants. Ul­ti­mately, the dream of pro­mot­ing an in­ter­na­tional cen­tre of cal­i­bre geared to at­tract in­ven­tors is to pop­u­late a home-grown in­no­va­tion hub, which is doable pro­vided sup­port is mar­shalled to help fund such a ven­ture. Nat­u­rally, a hub when fully op­er­a­tional at­tracts in­ter­na­tional aca­demics and en­trepreneurs to re­search and de­velop new ideas – the back­bone of strong start-ups, and the cre­ation of vir­tual bridges to global uni­ver­si­ties and tech­ni­cal in­sti­tutes fo­cused to dis­cover trends in cut­ting-edge tech­nolo­gies.

In con­clu­sion, help­ing to re­vive the ghost of SmartCity to com­min­gle with a sis­ter CIC cen­tre will vin­di­cate the orig­i­nal am­bi­tious plan to have an ac­tive re­search and devel­op­ment base. This is the magic for­mula that helped the US at­tract new in­dus­tries of stature (so-called Uni­corns) with unique high value-added able to with­stand the va­garies of in­ter­na­tional com­pe­ti­tion.

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