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maltatoday WEDNESDAY 18 OCTOBER 2017 13 Business Today W ith so much ado about in- novation and b l o c k c h a i n t e c h n o l o g y in the air, one may believe that having a research and business innovation hub in Malta com- plementary to Silicon Valley is not a fantasy dream similar to when Alice was caught staring at the Looking Glass in Lewis Carroll's novel. It can prove to be a true catalyst to anchor ex- isting manufacturing communi- ty and attract new ones. Skep- tics disagree, saying Malta will never attract the bonanza that enriched the Bay area. They la- ment this dream is an ambitious one as governments in Europe are in competition to attract blue-chip companies and start- ups particularly in biosciences, fintech and blockchain tech- nologies. But did La Vallette not resist the attack of the mighty Ottoman fleet in 1565? So hope springs eternal and an excellent effort was made last week when Netrefer and government agencies supported the Innovation Summit opened by Silvio Schembri – the parliamentary secretary for Digital Economy, Financial Services & Innovation. Opening the summit, Schembri said that next year the government is budgeting €2.2 million for research and innovation. Such funds will be dedicated to assisting researchers, startups and consortiums in research and innovation projects. The event had the unique pleasure and privilege to regale delegates by the presence of Edward De Bono, Malta's pioneer in Brain Training. Both the Education Minister and the minister responsible for Economy, Investment and SMEs gave their contributions and waxed lyrical about the need to attract and retain new talent. This prestigious event was a sequitur to another successful event organized and funded by the Malta Communications Authority, which organized a two-day international innovation event called Zest. The 2018 budget makes a token gesture by giving two-year tax breaks to PhD students of whom a mere 30 qualify annually. Ideally more doctorates are attracted to populate our research centres in spheres such as oncology, nanotechnology and quantum learning. The budget (now with a surplus) created a stir among political observers as the prime minister started on a high saying it was not an accountant's or a politician's budget, but a budget drawn up with an economic rationale. Equally worth mentioning was the event styled "Blueprint for Innovation" organized and sponsored exclusively by PKF at Microsoft Centre Skyparks last June. PKF introduced Stas Gayshan as a keynote speaker. He is the MD of Boston-based Cambridge Innovation Centre and a parallel organization to MIT university. The event saw an extended morning session and showcased an expert lineup of speakers. These included Gor Sargsyan, president, Qbitlogic International, Silicon Valley USA, Joe Woods Director, Creolabs, Kenneth Farrugia, chairman FinanceMalta, and Ing Joe Sammut CEO LifeSciences Park. Speakers from MCAST and University physics department were invited while Prime Minister Dr Joseph Muscat could not attend. Gor Sargsyan is the president of Qbitlogic International, Atlanta (USA) which is a US based company specialising in building multi-purpose approaches and tools that synergize the power of artificial intelligence and quantum computing to help humans build and protect software systems across various industries. Many multinational companies have opened their base in Silicon Valley where companies scout for the best talent. The Compass Global Startup Ecosystem Ranking of 2015 found Silicon Valley to be the world's leading innovation region incorporating venture capital investment, start-up company exit valuations, talent pool and entrepreneurial supports and networks. This is called an active ecosystem and basically is what glues together the fabric of innovation and design talents to create high value-added products. It is precisely what Malta lacks. Innovation is slowly becoming the new buzzword because both political parties promised in their election manifesto to substantially increase investment in innovation. We promised the EU to increase by up to four times the mere 0.7% of GDP annual contribution, albeit the 2018 budget makes no extra allocation. PKF thinks that its efforts to attract a world class organization in his field does not come a moment too soon although regrettably its altruistic attempts to fan our feeble flame of innovation was met with unenthusiastic support from government agencies branding it as another sound bite. Conversely the head of the National Social fund highly acclaimed the initiative to attract a top US business accelerator but felt that at this stage of economic development it was premature to support it. It is like putting the cart in front of the horse. Strangely, resistance to creating an ecosystem is ingrained such that some State agencies label it as spurious and proclaim that of its own it does not generate wealth or jobs. Extra millions so crucial on research makes policy makers ululate. Another drawback is venture capital. Even though we just read that banks increased customer deposits by 12% and this contributes to more liquidity yet venture capital never took ground. It is a given fact that the best start-ups look for VCs that can plug them into broader ecosystems to provide additional leverage and extend their vision. This brings us to the focal topic of this article. It starts with a recount of a pioneering trip last year by a delegation from PKF which together with Malta Enterprise visited Massachusetts Institute of Technology (MIT) in Boston, USA to explore links to promote Malta as a potential business accelerator and/or Life Sciences hub for innovators, start-ups and entrepreneurs. It is no stranger to accolades – rated as the world's best university in chemistry; economics; linguistics; materials sciences; nanotechnology and astronomy. Another interesting landmark is the Boston-based Cambridge Innovation Center (CIC) which opened new branches in St Louis, Missouri, Miami, Rotterdam, Warsaw and Sydney. Additionally, Android co- founder Rich Miner built his unique Google Android software in CIC. It also has a non-profit sister, the Venture Cafe Foundation (this provides a Forum for venture capitalists to scout and help fund new talent). What is so special about CIC? The answer is that as an innovation hub it succeeded to attract world class start-ups which proved very supportive for the US economy through the generation of premium jobs and its high value-added inventions. Now that the economy is on the mend and a modest surplus enthuses us on the horizon, we need to seriously plough back some of the fruits of our harvest into a proper ecosystem. In the near future, such an undertaking will be reinforced by the output of talent from Barts Medical school, MCAST, University, AUM and other colleges all acting in unison to baptize us as the birthplace of a nexus of superior minds in the Med. It is not an easy journey as many countries want to emulate the commercial success of Boston, New York, Singapore, Tel Aviv and Silicon Valley. An innovation centre partnered with CIC (among others) will shine a light to guide us along the shadowy tunnel at the end of which we can underpin GDP growth and improve our competitiveness level. Only thus can Alice ever discover the White Rabbit wearing a waistcoat and pocket watch that points to our island-graced with smiles and a cornucopia of riches. George Mangion is a senior partner of PKF, an audit and consultancy firm. He may be contacted at gmm@pkfmalta. com or on +356 21493041. George Mangion Innovation hub – not another Alice in Wonderland