CONCLUDING SPEECH BY THE HON. AUSTIN GATT, MINISTER FOR JUSTICE AND LOCAL GOVERNMENT, AT THE EXPORT MARKETING CONFERENCE ON INTERNATIONAL E-MARKETING IN THE DIGITAL ECONOMY

Mr Chairman, Ladies and Gentlemen

Over the past twelve months Malta has witnessed an increasing spate of activity embarked upon by leading technology and consultancy firms as well as constituted bodies directed towards creating an awareness amongst industry of the pervasive impact and of the ‘e-everything' philosophy. The organisation of today's Conference by METCO is a further important initiative in the dissemination process that must continue to be undertaken.

The New Economy that started on such a high – is today very much in the doldrums. Is the New Economy a passing fad? As one ‘dot.com' company after another folds up, to what extent does the New Economy constitute an ‘attractive' electronic myth as against a lasting reality? How much of the ‘e-everything' philosophy is salesmanship and hype?

The hard reality, is that the New Economy is experiencing the first maturity pains. The management and economic theory of the traditional economy is supported by over two hundred years of experience and theoretical development.

The business norms, rules, economics, theory and behaviour of the information economy are being scripted for the first time – with no experience to draw upon. Whilst the convulsions will continue to occur as the business norms mature, the truth is that the information economy is here to stay.

Malta cannot afford to underestimate the impact of the information economy on the global market place – including its positioning within this market place – Malta, consequently, cannot stand on the sidelines. The new ICT environment provides our local industry the potential to operate on the international market in a manner that was unthinkable only a few years ago. The constraints of size, geographical location, and the required critical mass to establish economies of scale are no longer, so to speak, ‘show stoppers'.

To a large degree, the limitations that the New Economy places on us are dependent on our intrinsic abilities – particularly the ability to be visionary and creative in how we can exploit the technological framework to promote Malta Inc and our individual businesses as well as the ability to embrace change and adopt new ways of conducting business.

Competitiveness will become highly dependent on whether an organisation attains ‘zero latency' – that is minimising the length of time to access a web site to less than six seconds: the time after which, research shows, that a client's interest wanes. Moreover, there will be no ‘Seventh Day': business transactions will be carried out 24 hours a day, seven days a week. Shopping will occur from the comfort of one's home as against trudging from Mellieha to Valletta! And, the "Sunday trading" issue becomes a non-issue!

Indeed, our vision for the future must be clear – Malta must become an information economy. In undertaking this transition, Malta must adopt a macro driven approach as against a piecemeal approach.

Whilst it is important that the leveraging of eCommerce to foster economic growth and wealth generation should be led by the Private Sector it is acknowledged that Government must work hand in hand with the private sector in order to establish a robust framework that allows eCommerce to flourish in Malta.

In this regard Government has established four fundamental principles which need to be in place to attain this goal. The first is the introduction of a legislative framework that balances two distinct and separate poles that shape the discussion and implementation of eCommerce: trust, privacy, and security on the one hand and personalisation of electronic services on the other.

It is, I believe, a strong endorsement of my Government's commitment to ensuring that Malta is well prepared for the New Economy when it is noted that Malta today has on its statute books a legislation for the regulation of eCommerce – introduced only six months after similar legislation was introduced in the UK or Ireland.

The second fundamental principle is that of ensuring that Malta has a predictable and stable regulatory framework that will enable the growth of eCommerce. Government recognises that poorly designed regulations or over-regulation will impede the growth of electronic commerce and will result in the loss of economic activity to countries with more suitable regulatory environments.

In truth – electronic commerce has already developed substantially without needing fundamental legal reforms. eCommerce does not change fundamental trading principles: a buyer finds a seller and enters into a contractual relationship. Nevertheless, the existing legislative and regulatory framework has evolved to facilitate a commercial model that is paper based.

It therefore becomes imperative that Government together with the private sector takes the lead to review legislation and regulations related to intellectual property taxation, fair trading, consumer affairs, customs, commercial, contractual, etc to determine whether they accommodate the needs of those engaged in electronic commerce.

The work here has to be on two fronts. On the one hand it must be directed to ensure that this legislative and regulatory framework is (a) technology neutral, (b) that the fundamental principles underlying the law of contract and tort remain untouched and (c) that compatibility exists between the principles of the framework as applied in Malta and of our major trading partners.

On the other hand, we must ensure that the regulatory framework incentivates the entrepreneur operating within an electronic commerce environment. Unnecessary red tape and bureaucratic processes have to be eliminated. eCommerce, ultimately depends on logistical support – and can only be successful if this logistical process is streamlined. Government Institutions such as METCO, MDC, IPSE and MFSC on the one hand and the Chamber of Commerce, Federation of Industry and the GRTU on the other have a critical role to play in supporting Government to develop a technology neutral framework for the information economy.

The third fundamental principle which underpins Government's Strategy for the new economy is the liberalisation of the telecommunications sector. The information economy and the information society is only realisable and can only mature if the telecommunications infrastructure is in place and accessible, and just as importantly if it is affordable. High access costs will militate against the use of technology as a fundamental medium for electronic service delivery and commerce.

Government's strategy to accelerate the liberalisation process from 2010 to 2003 is perhaps best vindicated by the coming onto the market of the second mobile telephony operator: ‘go Mobile'.

This is the start – and this is a momentum that we strongly seek to snowball. The cost of international bandwidth and the subsequent per user internet related costs are still far too high – thereby reducing both competitivity and accessibility. In this regard, Government is strongly of the opinion that these costs must be drastically reduced if Malta is truly to become an information economy and if it is to attract high value direct foreign investment that is information and technology dependent.

The fourth, and final, principle is that the attainment of the information economy is dependent, ultimately, on Malta becoming an information society. The attainment of the information economy and the information society will take far longer to mature unless a catalystic effort is engineered and orchestrated. Government is seeking to do this in three ways.

The first is through the establishment of the eMalta Commission which is to be launched in the coming weeks. The eMalta Commission which will report to the Ministry for Justice and Local Government is tasked to bring together the fragmented IT and information society initiatives and fuse these within an all encompassing macro strategy.

The second is the attainment of eGovernment. Given the size of government locally, the implementation of eGovernment will be all pervasive: it will impact every type of social and commercial community. It will, also, in instances "push" private enterprises to relate electronically with Government as the Government becomes increasingly dependent on IT – primarily when the Government introduces eProcurement.

Thirdly, Malta must aggressively strive to increase the supply of IT labour – whether this is technical or policy related. The lack of IT supply is a global issue – thereby making it far harder for us to resolve. The Federal Government of Germany made available last year 200,000 VISAS for IT related work.

Whilst Government is setting up an Institute for ITC within the Vocational College and a number of government entities are combining resources to address this critical issue, the reality is that no magic wands are available to address short term requirements. The information economy brings an exciting challenge and unique opportunities for Malta as a nation and to you - the entrepreneurial community in Malta.

Government is determined to provide the leadership to ensure that Malta becomes an Information Economy. Together, with you – the entrepreneurs – I am confident that Malta will truly become an aggressive Information Economy.

Thank you.