Malta Technology — 15 October 2010
Is Malta becoming Silicon Valley or India?

Since I am first and foremost a technology worker, that is to say a vampire who stays up all night crawling the internet, trends in investment in technology have always interested me. Apart from being of interest to me, I am also affected by these investments, as new job positions will be made available and more career choices are opened up.

Geert Claes, a Belgian guy who works in Malta and has a wealth of experience in the online world wrote this article on techcrunch.com. The article is about the advantages and disadvantages of investing in Malta. It’s an extremely good article, well researched and written with the knowledge of someone who’s lived here long enough to know where our strengths and pitfalls lie.

Honestly, any true IT or internet worker will tell you that power outages are a serious problem for any computer related business, especially internet based and especially if significant investment has been made. And few people seem to realise that we do have an unhealthy reliance on betting companies locally, as anyone who’s worked freelance will tell you. Geert also knows enough about our inflated housing market, which makes it damn near impossible to own a property without selling your life to a bank, and what a royal pain it is to get all your papers and bank accounts in order for you to move to Malta.

However Gaert, for all his excellent intentions and writing, did neglect to mention the one thing that cynics like me know is paramount in bringing foreign investment to Malta: low wages.

the euro is not your friend

This Euro is not your friend. Nor is the next one.

You heard it, low wages! Malta is fast becoming the new India, not in outsourcing, but in cheap labour. Apart from the fact that foreign investors are charged 5% tax, while if I earned the money they do I’d be charged at 35%, and apart from (mostly Northern) Europeans loving our sun and way of life, what they love most is the shit wages they can pay us.

Wouldn’t you like it? To make a million and pay €50,000 in taxes, while someone who earns €50,000 pays €17,500 in tax?

Companies which set up here in Malta can also get an awesome deal on local gradutes and post graduate students, who can be paid a pittance and worked like dogs.

Marketing staff in Malta cost easily half of what marketing staff on the continent do, while developers are in similar waters.

An excellent developer with years of experience whom I know very well was offered some JAVA work for €13 an hour. That’s less than some TEFL teachers make, and I know that for a fact. It’s also a standard offering for people with tertiary level education and years of online experience, the people who really make the companies money. Big money.

So while it’s all well and good that we pat each other on the back and feel proud we have so, oh so much IT investment, let’s remember who’s getting the short end of the stick; you. Because while your foreign boss is getting rich on the 5% tax rate, you’re the one getting getting shafted out of thousands of euros, simply because they know they can and there’s another 10 just like you.

it workers

Jew kif jgħidlek il-Malti: "Aħdem liba!"

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About Author

My name is Mark and I'm a hyperactive child of the internet, a professional copywriter based in Malta, a great fan of entropy and a Grammar Nazi. I'm online for far more hours than is healthy. This blog is about stuff that interests or irritates me. Contact me here

(6) Readers Comments

  1. G’day dude! I am glad you liked the article :) I agree that the wages in the non-iGaming world are laughable, well, not in a funny haha way. Wages tend to rely on the old offer and demand. The Maltese market is extremely small and since there is nowhere near a shortage in skilled IT professionals, the ball is in the employers court …. until the tables turn, and SmartCity becomes a huge success and companies struggle to attract qualified staff and are willing to pay attractive wages and … pigs fly :)

  2. Pingback: Carousel [Week 41, Year 2010] | Tamara Chetcuti

  3. Too true my man, too true!

  4. Excellent last caption :)

  5. Hey Mark, Excellent article. And Geert good point. Smart City WILL FAIL. Beyond all doubt it will fail -- firstly, Smart City is a real estate project and secondly there is NO real marketing plan behind it. It is doomed like the Mosta Technopark which is as successful as a dodo in heat. The Technopark was hailed in the 90s as Malta’s technology estate -- a Mecca for high tech firms. I sold the product with the then Malta Development Corporation but it received very little support or customer appeal. There were too many glitches in the system including the unfocused attention of the company and conflicting socio political motivations. On the one hand you have a drive to create employment volume with the given skills set on the other you have tech companies which are notoriously skills heavy (the skills were not available at the time) and capital intensive -- therefore it didn’t make sense to come to Malta! Smart City may be a great idea but it will not work simply because you are not going to attract the Microsofts, Oracles, Ciscos in this world in the same way our EU colleagues have done. We lack the infrastructure -- and by infrastructure I include good internet connections -- I mean good, real good. And by good I also mean inexpensive. This is one reason betting companies leave certain functions away from the island. Secondly the banking sector in Malta is too weak. BOV, for example, can never transact the volumes of e-payments that larger European banks could. The monthly revenues of some of the larger betting companies exceed BoV assets. Plus local banks are rarely willing to grant betting companies the ability to transact e-payments without exorbitant fees. Further, banks will not accept gaming companies as merchants. You may ask so what. The retort is, sod real estate investment, if Malta had the financial infrastructure (perhaps supported by government) to attract electronic transactions, then the investment therein would attract a phenomenal volume of foreign currency transactions at little cost (when compared to real estate Smart City).
    Finally, the shortage in IT skills locally is a myth -- the shortage lies in finding good developers with the proper skills set and know-how and capability to twist a problem around and solve it. How many good developers do you know? I have worked in IT and software development for over 10 years now: I know a total of 5 real guru like people and only one is still in Malta -- the others have gone away. Foreign companies will bring their own people to their top positions and when these companies are attracted by government the top posts are invariably filled by incompetent kiss-asses. Need I say more?

  6. Great stuff Kev, seems to me like you could’ve just written my post yourself too!

    I suppose the fundamental problem with our efforts has been our typical lack of planning. Huge projects can not work unless the lay up work is done first and foremost.

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