Editorial

Times have changed drastically for manufacturing industry since the early days of the island's industrialisation drive in the late 1950s. However, despite the changes and the growth of tourism and the services sector, there is still an important place in the economic set-up for the manufacturing industry. Malta has been gradually moving into a higher level of manufacturing as it seeks to go for firms making products that have a higher value added content than goods made in the earlier phases of industrialisation. But competition has grown and the present times do not exactly create the right environment for the promotion of the entrepreneurial spirit.

Even so, rather than taking a defeatist attitude, steps are being taken by the government and others to help existing and new firms to either strengthen their operational base or exploit opportunities that they might not have been able to tap into on their own so far. Two moves in this direction are of particular importance: the five schemes the government is offering to encourage investment and innovation and the Business Success Stories project being undertaken by the European Commission Representation in Malta and the Malta Business Bureau. The project is quite innovative in nature and may well contribute towards further growth at a time when it is most needed.

As the promoters of the project have well said, seizing the opportunities resulting from the island's membership of the European Union requires strategy, planning and the ability to compete effectively on the European level, which, it says, is no mean feat. Away from the difficult language often used in such exercises, firms wanting to penetrate new markets in the rest of the EU would simply have to think about it seriously and, if they are unable to do something about it on their own, get expert advice to help them out. They also have to think hard of the impact membership has had, or will have, on their own work. If they do not, they may well be edged out of the market altogether, as some have found out to their cost.

The European Commission Representation and the Malta Business Bureau have been researching firms that have made a success in the EU and are aiming at encouraging others to follow suit. They feel these businesses "are an inspiration and an example to others wanting to seize opportunities but which may not know where to start". Through their new project, they plan to explore and document the way that each participant has adapted to the new challenges. This is all to the good for it is naturally important to assess the situation and analyse the work of those firms that have successfully made it before offering to help others. The problem may well lie in reaching out to those that have a potential to break out into new markets or in persuading family firms to loosen up their grip on their businesses and get expert help in a bid to expand.

Even more important at this stage is to give direct help to firms that are struggling to make ends meet. A survey of the performance of small enterprises has shown that quite a number are not doing well and the prospects for next year are poorer. For immediate relief, one economist has suggested that the government settles overdue payments to them as a matter of urgency. It makes sense. Other direct assistance could help them ride the storm.