Many articles have been published about economic progress expected in 2050. There are countless predictions, but the reality of what ultimately unfolds lies beyond the reach of even the most powerful crystal ball. However, it is reasonable to predict that events and trends which made the headlines this year can help us foretell the events - on the notion that some continuation occurs.

As always, hard work matters. Integrity also matters, so we need to recommit ourselves to the fact that our reputation as an island nation is paramount. Mediocrity has no place in Malta's strategy for the future. Meritocracy and credibility form the cornerstone for a strong economy and a reliable country.

To us islanders - since Independence, there was nothing we could not aspire to achieve. Hindsight reminds us of a dream that drove the island by a tiny majority to join the European Union. This helped immensely to transform our economy from a fortress economy. Blessed with generous EU funds since 2004, all these helped us to enjoy a higher standard of living and improve infrastructure.

As a corollary to this benevolence, one cannot omit to mention heavy State subsidies on energy and food prices since Covid. Finance minister asserts that his policy proved beneficial and was the pivotal cause how Malta's core rate of inflation started to moderate. Castille apologists remind us that Malta's economy remains resilient together with a vibrant labour market. Unemployment remains at record lows and well below European averages. But what is in store for 2050 predictions. One may rejoice that the advent of AI and generative powers will give us a faster transformation to the industrious, and professional sectors.

On the upside, AI has the potential to significantly enhance productivity even in a minuscule economy such as ours. This will increase our national income, on the other hand, the question that keeps coming up is whether it will disrupt the labour market to such an extent that jobs will be lost and they will not be readily replaced, thereby dumping the furore of licensed agencies to recruit cheap labour from third countries.

HR experts warn us that it is not realistic to up-skill workforces so fast to fill new high-tech jobs so created. As a result, labour redeployment comes on a scale that involves changes in workforce demography, which one hopes will be addressed under the remit of a new migration law. This came a bit late in the day, yet as it takes ground and finds its own teeth; it launched new measures aimed at regulating the employment of third country nationals (TCNs) and enhancing the integration of foreign workers. Key changes, effective from August, involve advertising job vacancies locally before hiring, updated permit fees, and extended grace periods for terminated workers to seek new employment. The new framework seeks to manage migration in a way that supports long-term labour market needs and promotes workforce stability. It is guided by four key principles:

• Retention and stability;
• Protection of employee rights and enhancing working conditions;
• Aligning labour migration with labour market needs; and
• A skills-based approach in migration.

Jobsplus will now start monitoring employers' recruitment and termination patterns during applications for TCNs, focusing on those still abroad or changing employers.

Termination rates, calculated from official data, will exclude long-term internal transfers, and only apply to companies in their third year of operation. Firms exceeding set thresholds, based on company size, will have their applications refused, with limits gradually tightening between October and July 2026.

There has been an increase in fees for new recruits to encourage retention of foreign workers and lead to more selective applications. First-time applications and changes of employer will now cost €600, while renewals will be €150 per year for the duration of the permit. But the fly in the ointment is how the AI revolution disrupts the recruitment drive. This will trim some deskbound jobs, like working on Excel spreadsheets, accounting, the drafting of letters and reports, regular legal advice and standard correspondence.

Detractors, who resist change, will challenge the security and veracity of solutions generated by ChatGPT, Gemini or Deepseek. The answer is that all are highly secure, using encryption and authentication methods to ensure that conversations are kept private. This makes it ideal for business applications, such as customer service, where sensitive information may be discussed.

Additionally, ChatGPT is designed to be compliant with regulations such as GDPR and HIPAA, ensuring that any data shared is kept secure and private. By 2050 (if not earlier) mundane office tasks and some teaching facilities may be soon replaced by the likes of ChatGPT. This will reduce the staff headcount and hence the need to vacate desks. Another whiz kid on the block is "machine learning".

This is a type of AI, that can automatically reduce some human intervention, while "deep learning" is a subset of machine learning which is based on artificial neural networks that mimic the learning process of the human brain. In professional offices, by 2050 prophesies abound how AI can transform the bookkeeping and record filing functions for stakeholders in general. While it may be true that some jobs or functions, will be taken over by AI, by 2050 other job openings will emerge and fill the gap. Naturally for Malta, there is a red sign on the horizon that our education system needs priming up.

Logically, as a redeeming measure, any retiring lecturers ought to be retrained and expeditiously developed to continue imparting their expertise. With the rise of AI and the digital revolution, the current Jobsplus policy of attracting low-skilled TCNs must be reformed and redirected toward drawing in higher-calibre talent.

Will the digital revolution help us? Starting at high-level tasks, such as advisory, AI would require machine learning involving an expert (or a panel of experts) who would, gradually and over time, train the machine to output the correct conclusions following an analysis of the information related to the case at issue.

Not easy to predict what manpower turbulence may occur in the next 25 years, but in the event of redundancies, a practical approach could involve exploring how a four-day workweek might sustain productivity while operating with smaller teams.

George M. Mangion is a senior partner at PKF Malta