That Malta has no resources but its people is an obsolete perspective, a by product of the industrial age, which needs to change if we are to enhance our economic development. Resources are no longer tantamount to just raw materials such as crude oil, iron and timber.

Since the late 1950s, Malta's industrialisation, driven primarily by foreign direct investment, helped the country to prosper, creating employment and earn important foreign exchange. This had a multiplier effect and stimulated other local economic sectors such as retailing and real estate.

Now, we need to develop a new perspective of what "resources" entail. It is not hard to appreciate that, in the emerging global and regional scenarios, factors such as geographical location, heritage, the environment and the sea become important economic resources. Others, such as natural light, wind, time, flexibility, speed are less obvious; but they too can be exploited to help create unique market propositions. Internationally, there is a growing realisation that resources are no longer inherited (as with raw materials) but "created".

The emerging "knowledge" economy is adding another layer to existing economic structures. This is not a homogeneous process, and permeates existing economic structures to different degrees. Knowledge has always been the hallmark of human progress. Knowledge helped humans to make tools and weapons, to write and cook food; to evolve from the animal kingdom. Knowledge as an economic resource has come to encompass entrepreneurial and managerial capabilities, technological and marketing know-how. A society in search of continued prosperity needs to continue learning, to move away from competing on being cheap, to redefine its concept of resources so as to create a competitive edge.

To claim that our economy is losing out because of globalisation is to admit that our society has been badly prepared to face the emerging challenges. This is a responsibility that falls primarily on the government, which should have set the vision and given direction. I remember when, as part of the Value 2000 planning exercise, I ended up arguing with the constituted bodies that Malta joining the EU was not a vision in itself but merely a strategic choice in building a better economy, a more prosperous society. Today, we are paying the price of thwarted thinking, of having for too long placed political expediency ahead of economic requirements.

The government's omnipresence in our life has created the belief that our well being depends on it. This is only partly true. Equally important is that which is taking place in our enterprises, be they foreign or locally owned, manufacturing or services, private or public owned. It is at this level that "knowledge" assumes an economic meaning and becomes an integral part of the "value creation" process.

For a number of years now there has been talk about the need for our enterprises to go for higher value added and innovation. How many of our enterprises have really understood what this entails? While we have a handful of enterprises, mostly foreign owned, which continue to consolidate their presence in our economy, many others are faltering. My experience at the Institute for the Promotion of Small Enterprise taught me that often the major hurdle for many of our enterprises is the capacity and mindset of management itself. The belief that what has helped them to succeed in the past will serve them equally well in the future.

Many of our managers still believe that all they have to do is more of the same rather than to seek to play a different game. Too much emphasis is placed on controlling costs, on selling on the basis of low prices. These enterprises are trying to cater for too broad a spectrum of clients, trying to be everything to everyone.

They need to focus and specialise, matching their competencies and resources to specific market segments. Just like Malta should not be competing with China, for example, our furniture producers should not be competing with the IKEAs of this world. This will require that our firms too improve their business planning capabilities, moving closer to their clients and understanding better their competitors.

In particular, our enterprises need to find ways of how to cooperate and network. I appreciate that this is easier said than done. It is not easy to forget past rivalry and form new alliances.

Many of our firms are too small to stand alone. In small economies like ours, competitiveness demands greater collaboration among enterprises both within, and between, sectors. For example, our farming community, food processors and artisans need to work closer with local hotels and restaurants. We complain that we are unable to attract enough tourists to Malta. Then those that come here end up drinking Spanish wine and buying Malta souvenirs made in China.

Enterprises are like trees, they bear the fruit. Yet for trees to bloom they need soil, water, light, a supportive environment. This is the challenge that our government, each one of us, has in creating a prosperous society.