A few weeks ago I was struck by a story in Malta Today which talked about a carpenter named Joe Borg, known in Rabat as "Tal-Arlekkin," who has been making furniture in his workshop for over 50 years.  Mr Borg has retired, but the future of Tal-Arlekkin seems guaranteed as his son has taken over the be-spoke carpentry business.  There's nothing burlesque about this story; rather, it is evidence that in a world of mass production, there is still room for the small craftsman.

Mr Borg is one of a small breed of craftsmen who once were the backbone of economies but are now relegated to the sidelines. His story is a tale of hard work, sacrifices, family traditions, passion, originality, makeshift methods, durable products, commitment to quality, and appreciation for the customer. Mr Borg is a craftsman and entrepreneur of the highest order all rolled into one.  One could say he is a niche woodwork maker.

I'm all for more Joe Borgs of Tal-Arlekkin. It is symptomatic of the modern age that society and government think big but act small.  It is, of course, gainsaid that in large economies with mass markets this is eminently sensible, even more in the economic sense.  Marking one million wardrobes of a particular model will always be cheaper than making 100 wardrobes of different designs. And economy is what most customers want, isn't it?  But not all.

An EU report estimates average annual expenditure on crafts at €346m in 2022.  There are no published figures for Malta, to my knowledge.  The EU report refers a market of some 153m customers, the highest-spending of whom are people within the 56-70 age bracket, whereas the least-spending are those within the 30-25 years bracket.

On the downside, Eurostat reports the number of handicraft workers (including printing) at 927,000 in the same year, a substantial fall of 122,000 from pre-Covid days. The employment of handicraft and printing workers is projected to decline by 13 per cent between 2022 and 2035, in contrast to overall employment which is forecast to increase by 3.2 per cent.

This decline is somewhat surprising since in recent decades there have been important changes in how goods are designed, produced, marketed, and delivered.  These facts highlight the increasing importance of "superstar" products.  If I want to make a statement about me, I buy an Apple i-phone and change it for the latest model as soon as it comes out, or I can ask for a Hazelburn Old Cadenhead single malt, knowing full well that most bars wouldn't stock it, and "reluctantly" accept a JBs instead.  Flaunting one's own habits is not new, though. I had a friend who lived in London and used to put any goods he purchased in a well-preserved Harrods bag which he took with him to any store he visited.

A feature of modern economies is that consumer spending is becoming less concentrated, at the same time that overall consumption is increasing.  This is because spending is being spread across a wider product space.  Households are spending on their own preferred products but also differ on which products they consume.  In production and economics, this greater fragmentation of the product space is seen as a rise in "niche" consumption.  For example, we don't just choose between Pepsi-Cola and Coca-Cola, but if we buy the latter, we choose between Diet Coke, Coke Zero Sugar, Cherry Coke, Vanilla Coke, Creamy Vanilla Coke, and Orange Vanilla Coke.  This fragmentation is central to niche consumption.

Niches are prone to certain disadvantages.  Joe Borg Tal-Arlekkin surely suffered from lack of "economies of scale"   ̶   the lower unit costs that arise from operating at high production volumes.  They cater to individual customers having highly specific tastes and requirements.  They depend almost entirely on walk-in business; I bet those who knew of his existence would be in the hundreds, not thousands. They are highly vulnerable to market changes, all their eggs being in one basket.

On the other hand, craftsmen and micro-enterprises may also have some advantages.  Typically, they are exposed to less competition, their firm being a "big fish in a small pond."  Fino or Joinwell wouldn't spare a second thought to Tal-Arlekkin.  Another trump card is a clear focus on doing well a particular, often unique, product.  Obviously, they can often charge a higher because customers are prepared to pay for their expertise. Another plus point is that their customers tend to be more loyal.

For a time, economic globalisation led to standardisation and commoditisation of products and services   ̶   a process that involved loss of their unique features and making them interchangeable in the market.  This led consumers to choose primarily based on price, weakening producer pricing power and shifting competition from differentiation to cost.  Now, niches are making a comeback.

Niches can have a very positive impact on economic growth and development.  Economic globalisation tends to reduce the availability of niches, thus threatening long-term economic growth and diversity of commodities.  In contrast, niches contribute to diversification of economic systems and may have stabilising properties.

Niches are ideal for Small and Medium-sized Enterprises (SMEs) and micro-enterprises of the sort of Tal-Arlekkin. They fuel innovation and competition, support competitiveness in global markets and value chains, account for a large portion of employment, favour inclusion, and are often the lifeblood of local communities. They are also key in the transition of economies to a digital and sustainable future.

Taking the OECD as a whole, SMEs represent around 99% of all firms, are a main source of employment, and generate up to 60% of value added on average.  All policymakers agree that empowering SMEs and entrepreneurs is crucial to sustainable and inclusive growth.

Ecologists give great attention to the availability of niches as a factor in biological evolution and biodiversity.  On the other hand, economists and business management had until recently tended to concentrate on the role of large enterprises in economic growth, development, and the diversity of available commodities.  Having said that, as early as 1961, the Austrian-American economist and philosopher Ludwig von Mises had considered market niches via product differentiation as one of the most important means of competition, and thereby, of economic development.

What should the government do with the likes of Joe Borg?  Sing from Sammy Bartolo's lullaby "L-aħħar Bidwi f'Wied-il Għasel"?   Since the lullaby's composition in 1976, the number of farmers and their production have declined dramatically.  Between 2000 and 2024, the share of agriculture in our GDP fell by almost 75 percent to 0.5 percent.  Agriculture is on its death-bed.

Should we just prepare the next lullaby "L-Aħħar Mastrudaxxa f'Tal-Bajjada," or should we make a greater effort to encourage craftsmen like Joe Borg to thrive?  It is opportune that we strengthen the resilience of  craftsmen and SMEs to unlock their potential in the changing manufacturing landscape.

Two decades ago, a PN minister had forecast the death of manufacturing in Malta.  A huge outcry ensued.  Regrettably, his prophecy has proved true.  Manufacturing in our country has declined by 70 percent to just 5.7 percent of GDP. We just can't compete in the global world, not only because the Maltese market is so small, but also because we don't have factories that produce on a mass scale. Thinking outside the box, can't our new manufacturing come from an army of craftsmen?

Every time I visit Italy, I marvel at the range and quality of artisan products in agriculture, clothing, food, glass, leather, ceramics, jewellery and  textilses. Thank God, we have some entrepreneurs who have taken up the challenge. Companies like Premier Foods, Gozitan Gourmet, Silvio Vassallo Jewellery, Mvintage, Mdina Glass and others make us proud and show that it can be done.  

It's not that we aren't doing anything.  Malta Enterprise has incentives for craftsmen and craft businesses, MCAST run several courses for students interested in learning different crafts or managing craft businesses, and the EU itself is active with its programmes and funds.  But is there an active effective out-reach to convince our youth to pursue a career in crafts or for crafts to grow?

Malta is a member of the European Crafts Alliance, which is very active in nurturing talent and enterprise, business and skills development, online engagement with members and stakeholders, showcasing and expanding opportunities for craftsmen, exchanges, and expanding knowledge for the crafts industry.  Hopefully, we are making full use of its services.

Perhaps, some government entity might ask Joe Borg Tal-Arlekkin to pursue a new career as a mentor, inspiring students to pursue a craft.  I am sure he would do wonders to build their confidence and act like a role model, encouraging self-discovery and practical knowledge.

Frans Camilleri is an economist. He studied at Oxford and University of East Anglia, is a former corporate head at Air Malta, and has served on various public and private boards.