Clusters of success

The news that another aircraft maintenance company has decided to set up shop in Malta has helped us to rejoice at the enlargement of another cluster of successful industries that are enriching our economic structure.

SR Technics based in Switzerland and owned by business interests in the Gulf joins other similar companies like Lufthansa Technik and Medavia that have put Malta on the map of high value-added engineering services. With initial employment being planned to reach 350, the aircraft maintenance industry will soon be employing over 1,100 workers with good quality jobs that should last for a very long time.

It is also encouraging that our cluster of success is not moving beyond the white collar employment that characterises the activities of companies operating in the financial services and e-gaming sectors. SR Technics will in fact be relying mainly on young people who would have followed the engineering course at University and Mcast at different levels to achieve its business aims.

Young people who have a preference for technical education will now have the opportunity of emulating the example of accountants, bankers and other graduates in business studies to build a career based on the application of knowledge. If only our whole educational system could provide such high levels of achievement for our students we could be nearer to modernising our economy than we think.

The greatest merit of this new investment is the diversification that it is helping us to achieve in the spread of our economic activities. While tourism, property development, manufacturing and wholesale and retail business will continue to be important motors of our economy, the branching out into these new services that have a high added value element is of vital importance.

This importance comes from the fact that because of our size we have a limited range of profitable economic activities that can cushion us from major consequences when a particular sector of our economy underperforms. An industry like aircraft repair, for instance, is likely to suffer less in a global economic downturn than our export-oriented industries that often suffer great losses as a result of a global fall in demand for their products.

Another knock-on effect of this investment is the expenditure of €40 million that will go to the construction of the new hangar near our airport. A number of construction, engineering, and other services companies are bound to benefit when this project is being implemented.

One hopes that this new venture's dependence on the Easyjet business will not prove to be the Achilles heel of this project. A diversified client list is one of the ingredients of success for any business. We should also never forget that SR Technics closed its base in Ireland when it found that it was no longer viable to operate from that country because of high costs.

Another caveat that I would bring to the attention of our educational authorities is the need to be obsessed with quality in the training of our young people. Educational institutions can sometimes be the victims of their own success. As the number of applicants for courses that lead to a rewarding career path increase, there will always be the risk of stretching resources to the limit, thereby diluting standards.

Mcast is doing a very good job in providing the initial training for those young people who decide to obtain the necessary technical qualifications to join one of the aircraft maintenance companies. However, it is important that no effort is spared to ensure that both the human and physical resources necessary to maintain a high standard of training are always available.

The synergy between the operators in this industry and our educational institutions needs to be emulated in other industries to ensure that they provide the skills and expertise needed for today's industries.

There are other possible clusters of high added value industries that can operate successfully from Malta. I believe, for instance, that we can do more to attract a cluster of maritime services companies operating from Malta as Cyprus has done so successfully.

A tailor-made package of incentives can be devised that will include amenable physical facilities, enhanced training programmes for the specialist areas of education needed to support these activities, and a focused marketing effort.

These can be catalysts that will help us achieve further economic success.

jcassar@yahoo.com