Malta Business Bureau appeals to the government to remain focused on creating the right macroeconomic environment to nurture entrepreneurship and encourage businesses to expand their operation, thus contributing towards the country’s economic growth and employment
Last Wednesday, the Malta Business Bureau (MBB) met Prime Minister Lawrence Gonzi to discuss the findings and recommendations of a study that the MBB has carried out with key local SMEs and micro-enterprises. Finance Minister Tonio Fenech and Minister for Small Business Jason Azzopardi were also present.
MBB President George Vella, who led the business delegation, said that SMEs and micro-enterprises feel challenged when operating in the world’s largest market due to our small island-state status. During the meeting, the MBB delegation appealed to the government to remain focused on creating the right macroeconomic environment in order to nurture entrepreneurship and allow businesses to expand and further contribute towards economic growth and employment. This is particularly important during the current turbulent economic times.
Mr Vella explained how most of the firms participating in the MBB study claimed that Maltese companies have restructured their operations and aim to be innovative in the way they conduct business. However, Malta’s insularity greatly affects the competitiveness of local businesses, especially on the input-cost structure such as in the purchasing of raw materials and transportation costs. For instance, Maltese companies have to factor in the cost of double-freighting when importing raw materials and exporting a manufactured product. According to Mr Vella: “The government should do more to incentivise private operators to produce new and more frequent maritime routes to Malta. This is crucial in order to have reliable access to more time and cost-effective routes for distributors and manufacturers in particular.”
pointed out that Malta’s tourism industry is reiterating its call for an easing of intra-EU connections and air-transport accessibility for a greater attraction of long-haul non-European tourists to Malta. “In the light of the European Commission’s ambition to make Europe the world’s number one tourist destination, peripheral countries such as Malta should not fall behind other continental destinations,” he said.
According to the MBB president, market surveillance is crucial to ensure that inter-business competitiveness is kept as fair as possible, allowing for the maximum number of participating enterprises within the single market. The MBB believes that enforcement in respect of non-compliant operators needs to be properly addressed, and that initiatives could include a ban on marketing activities and the ‘naming-and-shaming’ of such free riders.
Another important element affecting the competitiveness of local SMEs and micro-enterprises is that, due to our market size, they cannot benefit from the same degree of economies of scale that their larger competitors have and this affects their negotiating power on the international markets. Mr Vella said: “The MBB believes now is the right time to introduce a national clusters policy. Despite a clusters initiative already being effective on a small-scale for research and development activities through Malta Enterprise, a holistic approach towards business clusters could certainly help other sectors boost productivity and promote products in an innovative manner whilst identifying new markets.”
The future of the European single market with specific focus on the EU’s digital agenda was also addressed during the meeting. The MBB president stressed the need to enhance small business accessibility to public procurement. For instance, the MBB advocated the promotion of e-procurement services in order to save administrative costs for businesses that regularly tap into the local procurement market, as well as boosting their prospects when bidding for work within the single market. “Work needs to be undertaken on the development of a trustworthy and interoperable e-signature system, facilitating the efforts of enterprises in successfully carrying out online commercial transactions,” said Mr Vella.
He encouraged the government to remain proactive by continuous investment in e-skills due to the very nature and fast pace of technological progress and the diversification of the Maltese economy. He also noted with pleasure that schemes made available for local businesses such as MicroInvest and MicroGuarantee will support small businesses in ensuring the availability of liquidity and capital for businesses to undertake new ventures or develop existing ones. He pointed out that the MBB is conducting a study to identify market gaps in the provision of the right access to finance for small businesses that will enable them to operate effectively within the EU single market.