Malta well-prepared to reap AI benefits, but one-third of labour force at risk of job displacement

Malta is well-prepared to reap the benefits of artificial intelligence but may experience job displacement among people with only a post-secondary education, a new study shows.

The study also cautions that women and young workers may also be negatively impacted.

The study titled ‘The Impact of Artificial Intelligence on Malta’s Labour Market’ argues the country is digitally equipped to harness the potential of AI.

“The digital infrastructure is advanced, digital intensity in companies is high, and people have strong digital skills. The labour market of Malta is slightly less susceptible to AI-related job displacement than other advanced economies due to higher complementarity,” the study’s conclusions read.

However, approximately one-third of the labour force is at risk of job displacement, with women, young, and people with only high school degrees being particularly vulnerable. “A mitigating factor in Malta is its already tight labour market.”

The study was carried out in the context of what it says is an AI revolution. As a result, the study’s author Thomas Gade says it has the potential to reshape the job landscape across a broad range of skills and sectors.

Analysing the current labour market situation, the study said the authorities are prioritising upskilling and reskilling of the labour force through the education system and lifelong learning.

“The National Education Strategy 2024-30 and the Lifelong Learning Strategy 2023-30 are pillars of this strategy. The authorities have also extended the Enterprise Skills Development Scheme intended to support small, medium-sized, and large enterprises to provide training to existing and new employees, in order to develop and update their skills and knowledge, and the authorities could review both the size of support and target groups,” the study reads.

It also pointed out bringing Malta closer to the frontier of digitalisation is important, especially for private sector adoption in SMEs, saying authorities are prioritising digital adoption and digital skills.

“The Digital Decade Strategic Roadmap 2023-30 is a key pillar in these efforts. The authorities have implemented a digitalization grant, supported by funds under the EU’s Recovery and Resilience Facility, covering 50 percent of expenses in digitalization of operations up to a maximum of €50,000. This grant is particularly important as it targets SMEs, which make up the large majority, of companies in Malta, and where digitalisation may be hindered by costs,” it read.

It said lowering the administrative burden of accessing public support schemes and continuing to roll out e-Government can play a key role in private sector adoption and greater efficiency.