Demand — practice question

Read the source material thoroughly before you answer Question 1. Source material: eSports sector in Malta The eSports fact file gives these figures: Worldwide total revenue in 2019: $1 billion European revenue in 2019: $300 million Total number of viewers worldwide: 454 million Increase in viewers compared with 2018: 15% eSports is now accepted as a sports contest, in the same way as other competitive games such as football and basketball. In eSports, people compete using video games either individually or as members of a team. eSports also draws large audiences who follow these online contests. eSports is expanding quickly, both in revenue earned and in viewer numbers. Demand has risen because incomes have increased and the cost of the technology needed to play or watch eSports has fallen. Changes in social attitudes have also raised female participation in eSports. The rapid expansion of this industry has encouraged investment from both the private sector and the public sector. Firms in the private sector sponsor different eSports teams and also promote their products during eSports competitions. Investment from the public sector has come from the governments of China, Denmark, Malaysia and Malta, mainly through development and training programmes for young eSports participants. The Maltese government, from a small island nation, wants Malta to become a major European centre for eSports in order to attract visitors to eSports events. The goal is for the eSports industry to add 1% to Malta's GDP, create 3000 more jobs and strengthen the current account of its balance of payments. Malta's service sector has long been significant and contributes roughly 90% of its GDP. Malta is an appealing tourist destination because of its mild climate. The island is also used as a setting for many films and TV series, which brings in further visitors who want to see the filming locations. However, to make growth sustainable, the government recognises the value of economic diversification and does not want the economy to become too specialised. To do this, the labour force must be adaptable and the government must invest in education and training. The government offers new scholarship schemes, arranges work placements and invites professionals from other countries to help train Maltese students. Even so, there are worries that these measures could be too costly and may take too long to make a major difference to the economy. Female participation in the labour force is also promoted. Table 1.1 shows the percentage of women in the labour force (%) and GDP per head ($) for selected countries in 2019.