The chivalrous quest of robotics and AI

Author: George Mangion
Published on Business Today 9th May 2019

One may be intrigued by the incidence of the heightened tempo in party propaganda embracing the upcoming MEP and Local Councils elections by political parties.

The administration is in a race to announce new projects to please voters. The latest fad seems to be promising to build more social housing – and of course government has given the green light for the Gozo tunnel.

Party apologists find comfort and prosper in hailing the administration for promising so many ambitious projects. Definitely others equally made hay while the sun shine under the patronage of the pro-business attitude of the Planning Authority.

On to the subject of robotics and artificial intelligence (AI). This has become the flavour of the month and finds the wholehearted support of government which, for the second time, is sponsoring a mega blockchain and AI conference this month.

This is an initiative in the right direction and has led to other events which are being organised concurrently by the private sector.

PKF had put its shoulders to the wheel when, three years ago, it hosted an international event at the Microsoft Innovation Centre, Skyparks Gudja. The event styled “Blueprint for Innovation” saw an expert lineup of speakers. These included Gor Sargsyan, MD , Qbiticlogic  International Atlanta USA based in Silicon Valley, Stas Gayshan MD, CIC Boston US, Jeffrey Pullicino Orlando Chairman MCST, Joe Woods MD, Creolabs, Netrefer CEO, Kenneth Farrugia ,President FinanceMalta, Ing Joe Sammut CEO LifeSciences Park, top speakers from MCAST and University while the parliamentary secretary Silvio Schembri responsible for Innovation at OPM gave the opening speech.

Media comments were positive as all agreed that the island needs to do more to boost its contribution to R&D which based as a percentage of GDP is one of the lowest in the EU and in this context, the government in its 2019 budget is pledging to open the taps for more investment.

The good news is that for the MEP and local council elections all political parties are promising to increase investment in innovation and related Blockchain subjects.

Alas, we heard it so many times by the public sector that it plans to support an innovation and business accelerator centre of caliber. It seems that the spirit is willing but the body is weak yet the private sector is slowly moving to fill the gap.

It professes to be a true catalyst to anchor existing research within the diverse manufacturing community and to attract new ones.

There is so much at risk for our country in its quest to harness the best brains in the fields of digital research and AI.

The nonchalant attitude of maintaining the status quo – saying “if it is not broken then do not change it” – is deceptive.

The trajectory of new technologies can be enigmatic. They start off from an initial idea, which is often outlandish or somewhat crazy, going through a series of milestones in laboratories, and finally making the leap from laboratories to the real world.

One may ask-what are the potential new technologies being researched and studied locally and how would these be applied in to improve the competiveness of our manufacturing and services economy.

Three years ago, the author pioneered a familiarisation trip visiting 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, inventors and entrepreneurs.

It is interesting to note that the Massachusetts Institute of Technology (MIT) is a private research university in Cambridge, Massachusetts founded in 1861 –  built in response to the increasing industrialisation of the United States.  The uniqueness of MIT is in its appetite for problem-solving – especially those intratable technical problems whose solutions make a tangible difference.

Be that as it may, while not taking giant steps yet within our limitations, one cannot but admire the world-class research ongoing in the Department of Physics at the University of Malta. A senior lecturer in quantum mechanics in the Department of Physics at the University of Malta is coordinating a pioneering project which involves group research.

The local team is concerned with developing the basis for a new kind of technology – machine learning which brings with it a substantial challenge.

What is machine learning and how does this science integrate with the latest craze of Artificial intelligence and its sister technology concerning driver-less cars?

Machine learning frequently involves solving problems of manipulating and classifying large numbers of vectors in high-dimensional spaces. Classical algorithms for solving such problems typically take time involving a number of vectors within the dimension of space.

Naturally with the advent of cheaper processors and huge data memory banks one can use super computers to manage data running at exponential speed. These so-called quantum computers are essential to manipulate high-dimensional vectors so common in clusters.

There are many applications which benefit from quantum learning using algorithms which lead to input-output relationships. This is important for tasks such as image and speech recognition or strategy optimisation, with growing applications in the IT industry and of course it is used to interpret real-time images relayed from multiple car sensors so prevalent in driver-less technology.

Ideas range from running computationally costly algorithms or their subroutines efficiently on a quantum computer to efficient translation of mathematical exercises involving various topics being researched.

Another application is in problem solving. Computers really took off only after it became possible to build not just single transistors but chips containing many of them, up to billions in the latest fast processors.

The limiting factor is their electricity consumption and heat generation so experimentation has started to use light as a source for running processors. This platform can be applied to improve devices across the board.

In the future, it will create a means for computers to work directly with light, which will run systems that are more efficient and use less power. One foreseen application is to create motion sensors so accurate that they could help us navigate underground, for example in digging long tunnels or underwater, where GPS signals are unavailable.

These technologies, which could disrupt markets and generate economic growth are merely the tip of the iceberg.

Understanding the inherent complexity of the quantum world, the ramifications how the laws of physics can disrupt information and its ability to adapt mathematical norms developed in quantum theory can place the island in a competitive stance where researchers are appreciated as creators of a bright future.


George Mangion

Author: George Mangion
Published on Business Today 9th May 2019
Get in touch: | +356 21 493 041

Our algorithmic venture into AI

Author: George Mangion
Published on Business Today 18th April 2019

It was Prime Minister Joseph Muscat, at a speech he gave last year at the Delta summit, who talked about a vision to regulate Artificial Intelligence (AI), the internet of things (IOT) in an all-encompassing regulatory framework.

In his mind set, Malta just about climbed the slippery slopes of blockchain, and is now in an adventurous mode to tackle the next mountain of AI.

Undoubtedly, a technology that USA tech giants pour billions of dollars annually into for research and development purposes.

It is an open secret that government is keen to be seen helping innovation and would like to see Malta becoming a jurisdiction that attracts talent from all over the world.

Artificial intelligence and robotics are two ‘overnight successes’ in advanced economies that have been decades in the making, and their intersection will soon change a multitude of industries.

The evolution of smarter AI and more versatile robotics has helped both technologies to push past repetitive tasks to take on adaptive and more intelligent applications. In the coming years, the result will be nothing short of a revolutionary paradigm shift.

AI technologies will continue disrupting beyond 2019 and become even more widely available due to affordable cloud computing and big data explosion.

The gargantuan task was taken on board by Silvio Schembri, Malta’s junior minister for the digital economy and innovation.

At a recent press conference in Singapore, he revealed the country’s plans for the government’s new task force in an ambitious mission to become one of the world’s leading AI nations.

How can Malta gain from the wave of popularity that is gripping the ubiquitous sector of robotics?

The answer is found in the impending age of smarter robotics. These will certainly have a profound impact on traditional manufacturing; for instance, our health sector will soon make use of robotics to allocate medicines to patients and assist in useful operations taking place in the operating theatre.

AI thrives best by combining large amounts of data sets with fast, iterative processing and intelligent algorithms. This allows the AI software to learn automatically from patterns or features in that vast data set.

It is trendy to read on latest AI topics in the mainstream news. It is no exaggeration that AI has become a catch-all media term that refers to any computer programme that automatically does something.

Many people make referrals to AI without actually knowing what it really means. There is often a public debate on whether it is an evil or a panacea for humanity. Put simply, one may explain that in Malta this technology will in the near future spearhead novelties in the manufacturing sectors and create interesting scenarios in areas of productivity, safety, service, transportation, land registration and police records.

More will be revealed in the near future, when driver-less cars will become fully functional and slowly enter into the mainstream.

Autonomously driven cars and drones are both forms of advanced robotics, and they will pave the way for more specialised services that will speed productivity. They will impact every area of our lives.

As was the case of the internet revolution, some of the originalities will happen in a gradual, evolutionary way; albeit some will happen in a sudden, revolutionary manner.

To delve deeper into the subject matter, one may mention that apart from AI there is its cousin – Machine Learning (ML), and its sibling – Deep Learning (DL).  One may actually think they are all of the same stable but in fact they are different.

AI and the Internet of Things (IOT) are inextricably intertwined, with several technological advances all converging at once to set the foundation for an AI and IoT paroxysm. AI involves machines that can perform tasks that are characteristic of human intelligence. Typically, it includes things like planning, understanding language, recognising objects and sounds, learning, and problem solving. It goes without saying that the learning process involves feeding huge amounts of data to the algorithm and allowing the algorithm to adjust itself and improve.

To give a simple example, machine learning has been used to make drastic improvements to computer vision (the ability of a machine to recognise an object in an image or video).  In order to achieve this, the process may involve gathering hundreds of thousands or even millions of pictures and then have humans tag them.

For example, the humans might tag pictures that have a cat in them versus those that do not. Then, the algorithm tries to build a model that can accurately tag a picture as containing a cat or not as well as a human. In its simplicity, one may then conclude that once the accuracy level is high enough, the machine has now “learned” what a cat looks like.

Deep learning processes are one of many approaches to machine learning. It was originally inspired by the structure and function of the brain, namely the interconnecting of many neurons.

PKF Malta has taken the initiative to launch a training lab called the The Bit-Pod concept. This is a meeting place for informal discussions among practitioners, engineers and IT enthusiasts to network where they can informally discuss topics on the cosmic subject of this technology.

This is a non-profit organisation, intended to help connect entrepreneurs (mainly start-ups) to people, programming engineers, and other enthusiasts across the AI, blockchain and robotic fields. Whether you are looking to connect, learn, share, or work, Bit-Pod offers a selection of opportunities to network with other start-ups helping you scale the slippery slopes of early stage development.

It is undoubtedly true, that in other countries such initiatives are automatically sponsored by government agencies. The champion is Israel, which habitually offers financial and logistical help to nurture growth among start-ups. Regardless, the private sector in Malta is ready to give its share to develop this ambitious niche that will place Malta among the front runners in technical innovation.

Mastering this objective helps Malta to fulfil its mission to establish a national artificial intelligence stratagem.  Do not miss booking your place at the tech crowd converging in Malta for the Innovation Summit to be held next month.

George Mangion

Author: George Mangion
Published on Business Today 18th April 2019
Get in touch: | +356 21 493 041

AI invasion – is Malta ready?

Author: George Mangion
Published on The Malta Independent 21st March 2019

No article this week can fail to mention the current uncertainty that is facing the British economy due to the complex political manoeuvring on an agreed deal on how best to exit the EU. Be that as it may, the Western world is also going through other major changes in the political, economic and administrative fields. The advent of Artificial Intelligence (AI) is entering the economic stage through the backdoor but many feel that it is so powerful that we can only ignore its influence at our own peril. It is no minnow. Experts predict that it in 10 years’ time it will underpin $15.7 trillion of global economic growth.

Some fear it will wreck job opportunities and create mass unemployment in certain sectors yet others are less sanguine and think that it will simply transform current jobs and create new ones. The McKinsey Global Institute reckons that by 2030 up to 375 million people, or 14 per cent of the global workforce, could have their jobs automated away. Employers will have to decide whether they are prepared to offer and pay for retraining, and whether they will give time off for it. Many companies are sympathetic to the need for workers to develop new skills, but mass education is the remit of national governments and should not come at the employer’s expense.

This is debatable because less advanced countries do not have the resources to train workers to reach the higher technical skills required once the AI revolution becomes mainstream. Technological change always causes disruption, but AI is likely to have a bigger impact than anything else since the advent of computers, and its consequences could be far more disruptive. Being both powerful and relatively cheap, it will spread faster than computers did and influence many sectors.

Another important question is how to protect privacy as AI spreads. The internet has already made it possible to track people’s digital behaviour in minute detail. There is little doubt that in the coming years, AI will offer even smarter tools for businesses to monitor consumers’ behaviours, both online and in the physical world. This could become a threat to privacy.

A corollary of AI is machine learning. One can explain this as autonomous learning capacity which empowers a machine to learn on its own without being explicitly programmed. It is a subset of AI that provides the underlying system with the ability to automatically learn and improve from experience. Today, many US firms are competing to provide AI-enhanced tools to companies.

As can be expected, millions are invested to develop new technologies and companies that achieve a major breakthrough in artificial intelligence could easily race ahead of rivals and toughen global competition. More likely, in the years ahead, is that AI might contribute to the rise of monopolies in industries outside the tech sector where there used to be dynamic markets, eventually stifling innovation and consumer choice. The fear is that smart computer programs will eliminate millions of jobs, condemning a generation to minimum wage drudgery or enforced idleness.

Never mind the robots, fear the software as real-life experience has shown otherwise. For example, the arrival of automated teller machines (ATMs) spared bank employees the job of handing out cash and freed them to offer financial advice to customers. Obviously, some jobs could be made a lot easier by AI. One example is taxi drivers. Some fear that taxi drivers will be replaced by autonomous vehicles. But in future taxis will still be manned particularly when needed in town to manoeuvre around busy streets which are far harder to drive through than driving long distances down a motorway. Interesting advances powered by AI are happening in many medical areas in hospitals.

Other potential uses of AI is to detect cyberattacks, or coordinate fleets of drones, and it is useful for mass surveillance where many people congregate as there is facial recognition. Furthermore, increased automation gives more physical control to digital systems, which in turn makes cyberattacks even more dangerous. Regulation is needed to ensure that AI engineers are employing best practices in fighting cybersecurity and limiting the intrusion of cyber thieves especially in banks and sensitive data centres.

The fusion of AI and Blockchain systems will further enlarge the arsenal with tools for fighting cybercrime and make DLT databases tamper-proof. For example, when any transaction is recorded on blockchain that transaction is made known throughout the chain connecting users to each other. Therefore, it is not possible to tamper with a blockchain, which is why trust is built into the system rather than guaranteed by a ‘central owner’ of the data.

This powerful technology is silently ushering in the fourth industrial revolution. It will allow individuals to regain control of their own data, such as medical health or education records, and use it in ways that would not have been possible in the past. Blockchain and DLT technology will improve the tracking of intellectual property rights, as well as strengthen the concept of ownership in the digital sphere. Having discussed briefly the uses of AI, how can tiny Malta ever play a part in this success story? It so happens that Prime Minister Joseph Muscat has called for a global framework for regulating research into, and the development of, artificial intelligence technologies when he addressed a top conference in Shanghai China last year. AI, the internet of things and a best-in-class regulatory framework are now high on the government’s agenda, following the successful introduction of the world’s first comprehensive set of blockchain laws last year. Castille is smelling the coffee and the penny has dropped to lay the foundations for a digital innovation hub. The fly in the ointment is having superlative technical facilities to train a workforce with the right skills. It is a tall order, since millions are needed to train a workforce proficient in AI but it is never too late to start. The government recently announced the funding of a scholarship bourse for postgraduate degrees, as well as a lab to encourage the exploration of emerging technologies. One looks forward with courage to the next Delta Summit this year sponsored by the government with the hope that it will attract tech-evangelists and AI engineers to help us build a local ecosystem. One hopes this fulfils the vision of the prime minister and hallmarks his legacy at a time when he is rumoured to be contemplating his exit from the political stage.

George Mangion

Author: George Mangion
Published on The Malta Independent 21st March 2019
Get in touch: | +356 21 493 041

PKF launches The BITPOD-an Innovation marvel.

Author: Dr. Marilyn Formosa
Published on: The Commercial Courier


The BITPOD, which will function as a quasi-lab, will comprise a live project dedicated to fuelling research and development with a special accent on the emerging fusion between technology and the financial world as we know it.

It goes without saying that distributed ledger technology and virtual financial assets will play an important role in the experiment which promises a publication by the end of the year to be made available to the public in a compilation of the findings, observations, conclusions and results.

Complimentary to the BITPOD will be the BITBLOCK Sessions which will present a series of ad hoc working sessions in a casual format, once again aimed at provoking thought, ideas and novel discussion with local as well as international patronage.

The importance of honing and harvesting research and development locally, and attracting the same from the international forum, cannot be stressed enough, especially in light of our national ambition to service a centre of excellence, within the advancing realms of robotics, AI and all forms of revolutionary living.

As a nation we certainly have the intention and now we are also armed with the legislation, but we still have a long way to go before we can confidently say that we have secured the coveted working ecosystem.

We commend the good work and investment being done by Government and encourage the private sector, to like ourselves, follow suit on this remarkable journey that promises to make its mark an indelible one.

Dr Marilyn Formosa
Head of Legal – PKF Malta

BitPod Centre
35, Mannarino Road, Birkirkara, BKR 9080
+356 2148 4373 I 2149 3041 I

Cryptocurrencies, robotics and AI will dominate 2019

Author: George Mangion
Published on Malta Today 14 January 2019

Malta just about climbed the hill of blockchain and must now scale the mountain of AI, a sector in which US tech giants pour billions of dollars in research and development.

Last year, the government was advised to take the bull by the horns and with the assistance of technical advisers rushed the Malta Digital Innovation Act together with a framework for virtual financial assets.

This was pioneering work, hoping that Malta will succeed (as it did in the remote gaming sphere) to be a leader in blockchain and its offspring,  the cryptocurrency regime.

Some say that Malta has taken the bull by the horns and plunged ahead in the sensitive area of virtual currency trading when virtual currencies were at their peak (Bitcoin peaked at $20,236) even though larger countries such as China, India, and EU countries were banning it. But of course, it is all a matter of the early bird catches the worm.

This year, while Bitcoin is making a shaky climb closer to $4,000, the entire industry of cryptocurrency is still reeling from hitting relative new lows. Since the start of the year, the number one cryptocurrency by market capitalisation is down nearly 80% since peaking in December 2017.

For some, the falling price of Bitcoin has raised the alarm and led to widespread selling out. This spurs negativity and a soured mood towards crypto and blockchain-based assets.

Yet hope springs eternal, since, at a recent Crypto Summit held in London by Bloomberg, panel speakers seemed to suggest that, while there’s no denying the immediate outlook for cryptocurrency is shaky, the industry is just experiencing a temporary setback. They hope it will eventually see a rally in the market this year.

Speaking on the panel, Chief Investment Officer at CCL Investment Management James Bevan gave hope to investors who have continued to stick with crypto through the falling market year.

This view was confirmed by Changpeng Zhao (CZ), the CEO of Binance. In his opinion, the market for cryptocurrencies has a promising future, and the year 2018 was merely a correction after the excessive growth that occurred during 2017. In particular, the strategy and business philosophy sustaining Binance have not changed at all; in fact, CZ noted that the company’s expansion plans are now more aggressive and structured, offering more services to a larger public.

Binance not only focuses on the use of current technologies but is also working to build a better future by investing in start-ups that do not have the necessary resources to begin but have great potential to help the ecosystem in the future. Given the level of innovation, security and digital functionality instilled by the technology of cryptocurrency, the industry as a whole has established a precedent pointing that the way forward for 2019 is more innovation and research.

Malta just about climbed the hill of blockchain and must now try scaling the mountain of AI, a sector in which US tech giants pour billions of dollars annually in research and development.

Quoting Forbes, it remarks that prospects for sustaining global competitiveness are now directly tied to the industrialisation of AI. AI and machine learning are predicted to reshape manufacturing, energy, transportation, and financial management. Countries that can successfully cultivate a culture of disruptive innovation will be strategically positioned to lead in the 21st century.

Alongside traditional manufacturing, the world is seeing a rising wave of innovation that has the capacity to transform existing markets and value networks. In particular, consider the application of approaches from big data, machine learning, and AI. All these forces have the power to process, analyse and utilise this data with the potential to transform healthcare, addressing major global challenges in the prevention, detection, and diagnosis of disease.

By contrast, governments that resist AI will find themselves facing a daunting future. It is welcoming to note that the EU has developed a funding initiative to help SMEs in the field of robotics and innovation. The funding is capped at €200,000 per each successful application and is part of the Horizon 2020 research and innovation programme.

Mindful of the legal and technical minefield that lay ahead, the MFSA called for experts to help design and draft parameters leading to a safe framework and good governance to face such challenges. It is an open secret that government is keen to be seen helping innovation and would like to see Malta becoming a jurisdiction that attracts talent from all over the world.

But readers may ask how can Bitcoin become mainstream unless fintech is attracted as well. We have just lost three private banks that closed last year and no effort should be spared to attract more members to the banking community. It is always a case that banks and monetary institutions are wary of challenges set by virtual currencies but like the internet, which was resisted in its early days, the DLT revolution is here to stay. Just ponder how, since we left the gold standard, central banks run billions of transactions in fiat currency which are not backed by any intrinsic value, yet we blindly trust such paper currency.

We know that following a process of quantitative easing practised in the EU and US, this has seen the printing of billions of paper currency by central banks to calm the markets and wipe off excess liquidity. Holders of fiat currency hold no qualms to trust in its exchange value. How does blockchain technology try to solve this dilemma? The answer is blockchain deciphers the trust issue.

It is undoubtedly true that last year, cryptocurrencies have had a very volatile history so caution among investors has set in. But we cannot stand and wait for the next rally. It is encouraging to see Prime Minister Joseph Muscat, at his year-end greetings, wax lyrical about Malta wanting to jump-start the process to regulate ostentatious topics such as research within AI and the Internet of Things, in an all-encompassing regulatory framework. This way the unassailable vision of a progressive Malta will become a reality and the entire island gains.

George Mangion

Author: George Mangion
Published on Malta Today 14 January 2019
Get in touch: | +356 21 493 041

Blockchain renaissance portends the collapse of certain accounting professions

Author: George Mangion
Published on Malta Today 28 November 2018

Blockchain technology has the potential to unsettle the nature of today’s accounting. It may constitute a way to vastly automate accounting processes in compliance with the regulatory requirements.

Granted that Blockchain adoption is still in its infancy but that hasn’t stopped experts from speculating on the vast changes the technology may bring. The accounting and auditing profession is investing heavily to try and harness its disruptive powers as is evident by declarations of the Big Four audit group which warn about the changes to the accounting profession that like a financial Tsunami will wreak havoc unless preventive action is taken by all to master it.
One can mention that for example, Deloitte has established a Blockchain consulting business and in certain countries, EY accepts Bitcoin for settling invoices. What is new about the future Blockchain-based accounting system? What does it look like? Theoretically, it would allow secure, verified information to be stored and accessed by multiple parties across multiple locations. Because a Blockchain is encrypted and consensus verified, it essentially notarises itself.
All of this adds up to the possibility of a replacement for the double-entry accounting method that has been commonplace since it was invented by the Medieval Italian philosopher Paccioli.
This technological marvel makes it nearly impossible for records to be falsified or corrupted. It is because as transactions are permanently added to the ledger (like blocks in a chain), information is transparently presented to all parties involved and one block is then linked to the next in the chain. Files can also be time-stamped and marked with a virtual fingerprint known as a “hash string” to ensure they remain unmodified. Imagine a future world, where accounting is not a double entry, but maintained in ledgers simultaneously recording the same item in multiple locations on multiple computers, all self-balancing. Needless to say, the system is self-checking every few minutes.
When Blockchain becomes mainstream, then the practical use of auditors and notaries (to name a few professions) may be entirely replaced by the use of smart contracts and other IT verification techniques.
In practical terms, what used to be an essential service rendered by auditors and notaries to record facts and check that transactions are verified independently now becomes pointless. In simple terms, Blockchain integration disrupts the future transactional world. In essence, there will no longer be a need for middlemen, no need for expensive reconciliations since theoretically the system fights against the imposition of any corrupt data. Simply put, there will be no need for month-end cycles, no need to bring together all the different books and records of departments and counter-parties.
The Blockchain technology has the potential to unsettle the nature of today’s accounting. It may constitute a way to vastly automate accounting processes in compliance with the regulatory requirements. There is a consolation that while certain professions become dinosaurs yet there will be a sleuth of new job applications opening for IT careers.
This generates a big demand for technical savvy workers. In addition to other skills, accountants, custodians and perhaps notaries may need to adopt new ways of thinking and acting in order to make the most to muster machine-learning tools. It goes without saying, this challenging world will need different ways of thinking to survive.
The most significant issue facing certain professions is a disruption. Soon, there will be the proliferation of Artificial Intelligence which empowers robotics, machine learning and Blockchain systems that as stated above, makes verification by auditors and registration of contracts redundant. Readers may be jolted by this assertion and think that this prediction is nothing but scare-mongering.
Yet, the way Blockchain technology is structured it is said to revolutionise the way records are kept and maintained. Naturally, having all data in Blockchain may open up new vacancies for cybercrime busters even though in theory hackers cannot access data through a central point of vulnerability, having already stated that Blockchain networks are nearly impenetrable. This may be the case yet the concentration of data in distributed centres attracts cybercrime.
Cybercrime’s footprint is increasing each year both in its sophistication and frequency. Traditional defence strategies such as hardening of firewalls and intrusion prevention systems are no longer sufficient. Away from the curse of cybercrime, the onset of Artificial Intelligence coupled with the power of machine-learning will open new horizons in the next decade.
There is no denying that it is a complex and ever-changing technological context. This interaction will be highly productive in creating new business opportunities which will be baptising the fourth Industrial revolution. One may question why all the fuss about Blockchain. Certainly, AI techniques are not new although we are hearing more about them as they are becoming the next buzzword.
Following the birth of the internet, twenty years ago we have seen and waited quietly for the next miracle in business development. Blockchain and its derivatives are here purporting to be the next miracle since the design of the ubiquitous steam-engine. Taking the bull by the horns, Malta was quick to embrace the revolution and has promulgated laws to regulate it.
But it is still in the early stages. For Malta, diversification is a good start, yet we need to nurture a team of technical advisers assisted by a growing number of crypto-friendly banks. With the support of efficient yet friendly regulation in the midst of a growing cohort of IT experts supported by Fintech – this makes the dream come true.
Surely we must double the research and development spend by Malta Enterprise – a government agency responsible for industrial promotion. This funding is badly needed in order to develop a deep understanding of how AI can speed the expansion of new business opportunities making judicious use of intelligent systems. Unless the government takes the first step to funding new research and invests in upgrading the levels of science and maths in secondary schools the growth will fizzle out. Quality education is the building block of future generations of IT savvy students.
Malta (like most other EU countries) is constantly looking to attract new talent to build a resource of workers necessary to fully exploit powerful new technologies. Otherwise having set the legal infrastructure for regulating Blockchain without maintaining momentum is like opening a grand pub with no beer. More funds are needed to multiply the efforts in our university to research machine and quantum learning.
These leaders will tap into our own cognitive strengths – pattern recognition and learning, machine vision and game playing. In conclusion, Malta needs to build on its initial successes as a Blockchain regulator yet if it wishes to succeed as the Blockchain Island in the Med, more energy is expected from MFSA to attract international IT companies and crypto-friendly banks.
Simply having the government sponsoring mega conferences and summits is a good start but it is not enough. The future is bright if we can muster the unassailable disruption that is expected to hit some of our professions.

George Mangion

Author: George Mangion
Published on Malta Today 28 November 2018
Get in touch: | +356 21 493 041

Green energy conundrum and the impact of climate change

Author: George Mangion
Published on Malta Chamber Monday 8th October 2018

Between 1990 and 2007, we have seen a startling increase in global greenhouse gas emissions. Concentrations of carbon dioxide in the Mediterranean have increased, along with the atmospheric variations, and this is giving us colder winters and higher humidity in summers.

All lines of evidence taken together make it an unambiguous conclusion that the increase in carbon dioxide concentrations is human-induced, and is predominantly a result of fossil fuel burning.

It’s time to start reducing such emissions in order to mitigate the effect of climate change. The ambitious target is that by 2020, EU members will obtain 20 per cent of their total energy consumption requirements with renewable energy sources. What is renewable energy? The answer is that it includes wind, solar, hydro-electric and tidal power as well as geothermal energy and biomass.

Malta has so far been a laggard in this regard – only a number of small steps have so far been taken. On the other hand, from studies published by the EU, one notes that Germany leads the pack as a country which has invested the highest amount in this sector, claiming to be the world’s first major renewable energy economy (in 2010, investments totalled €26 billion). According to official figures, some 370,000 people in Germany were employed in the renewable energy sector in 2010, and it is no surprise to discover that most companies benefiting from this sector are small and medium-sized companies.

It is a fact that greenhouse gases, when controlled, can serve a useful purpose –that is, to absorb infrared radiation from the sun and re-emit it in all directions. Without this natural greenhouse effect, primarily resulting in the creation of water vapour and resultant carbon dioxide, which functions as a shield to protect the Earth’s surface, the mean surface temperature would be intolerable. Thanks to this shield, we enjoy a habitable average temperature. We also have the issue of sea level rise. It is estimated that over this century, we will encounter sea-level rise of between 0.18m and 0.69m.

In the case of Malta, this is an issue of major concern, since severe climate change may cause parts of the island to become submerged under water. The east coast will be particularly hit, especially low-lying areas such as Sliema, Gzira, and Msida, among others. It goes without saying that sea-level rise will have a significant impact on our economy.

It begs the question why Malta, with good exposure to rays of the sun all year round, has still not succeeded in increasing electricity production to EU levels from use of photovoltaic panels. There are concerns that the quantity of solar panels needed to harvest such energy is massive and considering the island is so small (so far, around 27% is built-up) experts claim that to achieve the desired power, we only need an area equal to 7% of land to advance electricity the supply. Given that the country receives about 550,000GWH of solar energy annually, experts claim we only need to capture less than one percent of such energy to power our systems.

Recently research in new technology has been making giant steps, by testing new prototypes made of highly conductive materials such as silicon. In turn, they use ingenious ways to capture the energy of the sun and convert it to electricity through an inverter. Simply fitting more panels on rooftops seems easy, but the demographic and geographic characteristics of the island create issues of spatial planning. But rejoice, as it is not all doom and gloom.

Having started from zero in 1995 there has been a huge leap in the number of rooftop installations to date. Official statistics indicate that PV has grown at an average yearly rate of 35% from 1995 to 2005 (1,8 kW to 40 kW) and 63% between 2005 and 2010.

The easy answer to the green energy conundrum is – the possible we do now, miracles can wait. But it is crucial that each individual gets involved in this process, and that every government and the private sector do something tangible to reduce the impact of climate change. Only then can we protect our environment, society, and economy, and only when collectively we get involved can we safeguard a better and safe planet for future generations.

George Mangion

Author: George Mangion
Published on Malta Chamber Monday 8th October 2018
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The Cashless Banking Revolution

Author: James Camilleri
Junior Legal Assistant, PKF Malta
Published on Malta Chamber on Wednesday 03rd October 2018

Anyone employed in a banking environment will know how time-consuming the physical handling of money is, and what a considerable part of the banking process it constitutes. Besides the manual process being laborious, there are security concern principles that need to be in place at all times, more so during the handling and transportation of physical currency.

Armed robberies which may even result in murder are not only scenes of a movie, but to this day present a tragic threat to a banking institution. For the movement of physical money, it is common to resort to the engagement of specialised personnel and armoured vehicles – this, clearly, is an added expense to the banking industry.

In order to be certain of the exact amount of money present within the purview of the bank, employees need to be assigned with the task of counting the money being circulated within their responsibility accurately. Money can be counted by hand as well as by the use of specific machines. However, though the adoption of such machines is less labour-intensive, it cannot be said to relieve the bank of the chore of requiring the knowledge of the exact total currency that is or should be present. Over-and-above the maladies of physically handling money is the strain of having to lift large bundles of money that can give rise to work-related injuries, which in turn costs the bank in terms of sick-leave entitlement claims and, possibly, even lawsuits.

As it were, electronic credits do not have a physical presence and their movement is through the networks of information and communication technology (ICT). The need to count money manually or by machine is removed, as the computer software adopted is inbuilt with all the necessary functionality. Compare, if you will, the movement of physical money by means of bulletproof vans with the electronic equivalent available at the push of a button.

Sweden is a fine example of cashless banking. Riksbank, the Swedish central bank, concords that more people have access to payment cards than they do to cash. Besides, it points out 85 per cent of the population has an online banking facility. The circulation of physical currency has been diminishing year in year out, and the tendency is to seek digital forms of payment; that is, payment cards but also next-generation technology like e-wallets and mobile payment apps. Cash transactions now constitute a lowly 2 per cent of the Swedish economy’s gross domestic product. The implications of this are that the payments industry will have to be reviewed, as less providers would be needed given one of the benefits of cashless transactions is to automate processes previously requiring human intervention.

The incumbent Governor of Sveriges Riksbank, Stefan Nils Magnus Ingves, points out, however, that due to a perpetual fear of a hypothetical financial crisis occurring, there is, as things stand, an indelible need for the presence of physical cash to remain available. Another important factor is that certain people accustomed to the conventional methods of payment will remain hostile to the digital revolution. The Riksbank Act says that ‘[b]anknotes and coins issued by the Riksbank are legal tender’, yet retailers are under no obligation to offer the option to customers for paying in physical cash.

The trend in Sweden is presently driven by Swish, an instant payment app developed by the seven most prominent banks in the country. The central bank is further considering the introduction of a government-backed virtual currency called the e-krona. Having said that, it is still in the early stages of development and the technical details have not been indicated. Besides, the central bank hasn’t given its full support for the e-krona project, being cautious of the drawbacks of cryptocurrencies, for example, their lack of stability.

It can be said that several markets have made progress in the cashless journey by investing in technology-enabling advancements. Besides Sweden, Australia too is trying to go full-circle. Brazil has been slow to reap the benefits of putting the basics in place, while China and Kenya have combined the cashless-enabling technology with cash reduction incentives to speed up the process.

Finally, the German and Japanese markets have expanded before gradually reaching a standstill, notwithstanding their government’s efforts of having the proper infrastructure in place.

Author: James Camilleri
Junior Legal Assistant, PKF Malta
Published on Malta Chamber on Wednesday 03rd October 2018