The rod rather than the fish

Over the past days, the government renewed its commitment to the small business sector with a number of initiatives designed to provide more tools for SME operators to be better equipped in an ever-changing, ever-challenging reality.

SMEs, constituting the great majority of businesses in Malta, are held in high esteem by the government. More so are micro enterprises that employ fewer than 10 workers, for whom a network of support is set up to help them negotiate their way into new ventures, devise new projects, penetrate new markets and generally increase their success rate.

Gateway to Export is one such tool SMEs can avail of to broaden their horizons and set their sights on new markets via exportation. We know too well that bigger businesses have been exporting locally-produced goods to foreign markets for years. Some might even argue that that’s where the real money is.

The government is aware of the seemingly insurmountable hurdles micro companies come across when they try to look in this direction. Hurdles of a bureaucratic, administrative or even executive nature often materialise as serious stumbling blocks for our small businesses. Every starting point is challenging and attempting to start an exportation venture might well seem more daunting and discouraging.

Gateway to Export is designed to address these fears and offer solid help. Companies employing fewer than 50 people, have a turnover of under €10 million and whose yearly export does not exceed 20 per cent of their production are eligible to apply with Malta Enterprise, which will be administering the scheme. Malta Enterprise will carry out an evaluation of the product or service the company plans to export, establishing whether this is suitable for export. The SME will be helped to identify any changes the service or product will need to undergo in order to make it. An analysis of the financial, marketing and human resources of the applicant will be made to ensure it is well equipped for the venture. The business will be helped to work out expenses, evaluate competition and see that there is profitability ahead.

Based on this, an action plan, which will be specifically designed for each business, will be drawn up and may include advice on compliance issues in order for the product to reach international and particular market specifications, advice on how to improve productivity by investing in machinery or identifying lack of efficiency in procedures, advice on what sort of skills the business is lacking and help on a marketing level.

This bespoke service leads the company into the actual exportation process, whereby other Malta Enterprise schemes and the possibility of participation in international fairs, trade missions and networking events help it further raise its visibility abroad.

This scheme is the latest that joins the long list of schemes the government offers to SMEs to help them increase their efficiency and profit-ability and generally come up with innovative projects. The government has always applied the age-old wisdom of providing the rod rather than the fish.

Microinvest has given self employed and other micro businesses employing fewer than 10 people the possibility to get a tax-refund of up to 40 per cent (60 per cent for Gozo-based SMEs) on all investment carried out or new employees taken on board for the years 2010 and 2011.

European Regional Development Funds (ERDF) have and are supplying numerous companies with the necessary funding to come up with new projects, kick starting a very healthy economic cycle. Malta Enterprise has already awarded €24.9 million to 396 companies to improve their international competitiveness, venture into innovative projects or improve their environmental credentials, carry out R&D or expand their firm into e-business. These funds also help companies improve their energy efficiency and assist new start-ups, giving them the necessary push at that strategically critical time of business-infancy. Some of these pro-jects are indeed interesting to learn about as they show the creativity and skill possessed by businesses is truly second to none.

The government is committed to continue supplying small businesses with more tools that will help them face the challenges ahead. We shall not stop with the millions of euros invested in the upgrading of industrial areas from where SMEs operate, or the development of new SME parks specifically designed for them. We shall not take a break after passing the Small Business Act, which will instil an SME-friendly attitude in the public sector while ensuring that legislation and the necessary bureaucracy reflect the needs and aspirations of the sector. The government will not even stop at the Microcredit scheme, which is planned to be launched in the coming weeks and will help more small businesses devise innovative projects.

For a long time now the general consensus has been that SMEs play a main role in the country’s economic aspirations. The government wants to continue supporting this idea with more schemes, initiatives and concrete action.

Dr Azzopardi is Parliamentary Secretary for Small Business and Land.