Can competitiveness fit with an improved quality of life in Malta? | Gordon Cordina

The answer is a resounding yes, and the digital economy is probably the best path to achieve this.

Economics is the art of reaching an equilibrium to generate the best outcomes out of competing pressures fighting for limited resources. The Maltese economy survives and thrives by offering value to global business in a manner which meets the expectations and aspirations of its population.

How does the balance sheet of the Maltese economy look to international business and investment decision-makers? On the assets side, a stable democracy within the EU and eurozone, boasting an enviable macroeconomic track record and international credit ratings, strategically located on at the Mediterranean crossroad, with the idyllic island aura attracting international visitors, also thanks to a strong backbone of physical and digital connectivity. On the liabilities side, Malta’s size and peripherality inevitably limit the range of business that may be productively undertaken, while the country is heavily engaged in meeting global requirements with respect to combatting money laundering and financial crime. Crucially, in an increasingly globalised world, Malta faces stiff competition for international business from similar jurisdictions with locations as diverse as Northern Ireland to Singapore, Cyprus to New Zealand.

What does the resident population demand of its economy? More and better paid jobs remain an obvious priority, nowadays flanked by equally important considerations affecting well-being including environmental and resource sustainability, the liveability of urban spaces, the ability to manage one’s time more effectively, and the inclusion in social and political decision-making processes, to mention but a few. With the hindsight of the experience of the COVID situation over the past few weeks,

one would easily add the robustness of the national health system and the resilience of business activities underpinning jobs to this wishlist.

The digital economy is an obvious vocation for Malta. It is the smart strategic fit that can and indeed already is balancing the need to sustain an internationally competitive and relevant small island economy in the global landscape with the aspirations of an upcoming and modern Maltese society that yearns for the fundamental characteristics that have traditionally upheld the quality of life on our islands.

The promise of the digital economy comes from the very definition of the term. It is about the fundamental economic functions of working, producing, consuming, saving and investing, but in a setup that is intensively or hyper-connected and which makes use of sensor technologies. This will allow us to continue doing what we are doing in better ways, and achieve more with less, making far better use of our time and living spaces.

The specific opportunities for Malta are obvious. The problems of small economic size and insularity have little relevance in the digital space. While production would take place in locations close to resources or final markets, its management and global coordination can take place from Malta, generating value added and high-quality jobs in our economy. Digital working and commerce can go a long way to address traffic congestion problems on our islands, giving us much-needed time to manage as we best please, and space to enjoy communally. Data and information will be key to better manage our environment and resources.

Tourism experiences can be enhanced through virtual and augmented experiences, attracting higher-spending niches. Digital investments are key to managing information and building more robust regulatory platform to ensure the stability and security of our financial services industry and other key sectors such as remote gaming, steering away from high-risk activities which the digital economy can enable but which are not suited to the reputation of the country. The digital economy is in itself a sector of activity creating high-quality jobs, whose output permeates all other dimensions of the economy and society bringing enhancements across the board.

The reaping of the dividends from the digital economy is not automatic. It requires a concerted effort from social and civil stakeholders. Government needs to be at the pinnacle of these efforts to secure sufficient investment in human and physical capital required to achieved the digital transformation, and mobilise the involvement especially of those sectors which are less amenable to innovation, but most likely to benefit from it.