Malta Enterprise retains international strategy despite slowdown
David Darmanin
Charlot Zahra
Despite the international perception of Maltese banks being among the top ten most reliable in the world, Malta Enterprise (ME) does not seem to have exploited this situation by means of a new strategy aimed at attracting specific types of foreign investors to Malta. It has however informed this newspaper that it recognises this current situation as “an opportunity”.
ME has instead chosen to react to the current global situation by retaining its international strategy while upping its support to those industries that have already set up base here.
Asked for details, a spokesperson for ME confirmed with Business Today that: “The primary vision of Malta Enterprise still remains that of increasing SME investment in high-tech sectors including electronics, aviation, precision component tools, pharmaceuticals and advanced healthcare and medical equipment among others.”
She also explained that Malta Enterprise promotes investment in low-tech but equally high value adding sectors like filming and audio-visual, international logistics and the maritime industry.
“The Knowledge Based Industry is considered highly important for the local economy and this also includes education and training, software development, R&D, design and back office operations,” she said. “Malta Enterprise also assists those sectors that need to evolve in the value chain towards becoming more value adding so as to ensure their sustainability. These sectors include engineering, manufacturing of furniture and food, and textiles.”
In the recent past, companies such as Dionica and Availacall, to name two, have let Maltese authorities down as they laid off their entire workforces once they realised that their projects were not feasible. Foreign SMEs without adequate financial stability and with interests in vulnerable economies are now more than ever susceptible to the crunch.
But the ME spokesperson claimed that the financial stability of companies is “clearly very important when it comes to foreign investment. All projects are evaluated on the extent of high value adding employment, sustainability of employment, intended cumulative investment, and turnover levels. Furthermore ME carries out a risk analysis that takes into consideration both the viability of the project as well as the exposure of Malta Enterprise due to the assistance being offered.
“When it comes to start-ups, the same formula is used. However, with some more tolerance for innovation that is so crucial to any economy. Start-ups do not expose the economy to any significant risk due to their small size. Therefore the economy should not ignore start-ups as it would suffer in the long run.
“There are some sectors that may be seen as more volatile then others particularly in the services and back office operations sectors. However they have the advantage of a quick return for the economy due to their fast set-up times and relatively high employment numbers. The solution here then is to have a balance of both types of investment,” she said.
The official also told Business Today that because ME is well aware of the possible repercussions of the looming recession, it has stepped up its support to locally based companies.
“In view of the fact that the financial crisis is likely to bring on an economic recession, Malta Enterprise is supporting even more vigorously the export promotion efforts of companies based in Malta,” she said. “Our support is now going beyond simply co-financing participation in exhibitions or fairs. In fact we are also supporting financially through a number of different schemes, the whole process of marketing, starting from the appointment of a business mentor, the devising and drawing up of the marketing plan and other follow-up actions. Although the financial crisis has brought severe problems in a number of countries it can prove to be an opportunity for Malta to attract companies that are on the lookout to rationalise their operations by investing in a country that allows for differentiation through its skills base; and/or offers a cheaper cost base. Up to now the financial upheaval has not had a significant impact on the local industry.”
