Addressing our economic challenges through research

The spillover effect of research and innovation into other business sectors, creating a better economic scenario and a more competitive offering as a country, is known but often forgotten. When research and development is conducted in a successful way, it automatically leads to investments in capital equipment and human resources. This does not only generate new ideas and products to satisfy and enhance consumer welfare but improves business processes and opportunities, increases productivity and promises an overall competitive advantage.

The committee’s document identifies important gaps and points out urgent priorities- Tancred Tabone

A country which nurtures research and development through supporting its business community will reap constant long term value added. During the financial crisis, those countries which invested mostly in research and development were those that least needed to resort to drastic austerity measures such as increasing tax rates, raising the retirement age and reducing social benefits as happened in several southern European countries. The support required by the business community for the conduct of RTDI is the provision of an adequate and sustainable infrastructure in research and innovation and giving the subject due importance in a growth generating strategy.

Research and development is more relevant to our everyday discussions than could at first be expected. Research and development promises to raise the bar in terms of what Maltese companies have to offer in terms of both product and service. The higher the sophistication, the higher the price the offer can command. The same applies for wages. More advanced skills which are needed for more sophisticated products and services translate into higher remuneration for workers. RTDI is therefore seen as a means towards higher sophistication resulting in incomes. This would go a long way in solving a recent issue relating to the minimum wage in Malta. The Malta Chamber criticised the proposal to increase the minimum wage as being simplistic and a short-sighted reaction. On the other hand, increasing incomes through innovation, specialisation and sophistication is perceived as a far more sustainable solution and one which is in the country’s better long-term interest.

For this reason, the Malta Chamber felt the need to set up a Research, Technology, Development and Innovation committee to advise its council on related matters. In reaching its objectives, this new committee shall develop position papers, discuss related policy matters with the relevant authorities and stakeholders and, most importantly, seek to raise awareness and communicate the importance of research, development and innovation with businesses and the public.

The committee has already started to function and has successfully evaluated the local situation. It formulated a document which identifies important gaps and points out some urgent priorities in terms of remedial action required. The document is intended to serve as an eye opener for stakeholders to place RTDI at the forefront of the Government’s agenda where it will contribute towards the creation of a more dynamic and competitive environment.

One of the main issues which are being highlighted by the study is the lack of funds which are being directed towards research and development in comparison to the EU’s target of three per cent of GDP by 2020. Innovation is one of the EU’s main objectives that the Commission has proposed in its Europe 2020 agenda which is being aimed at member states’ local authorities. It is clear that to meet the proposed targets, Malta needs to refocus its energies and make sure that research and development is a priority.

In the near future the Malta Chamber RTDI committee will be holding awareness events on the findings and concrete proposals in the document which the business community will be encouraged to attend.

Tancred Tabone is president of the Malta Chamber of Commerce, Enterprise and Industry.