Our economy has been growing at a steady pace for decades now. I have mentioned in previous contributions that our last big economic downturn was more than 30 years ago, during the first half of the 1980s. Because success tends to have many fathers, there are many who claim fatherhood of the country’s current economic performance. Some forget that in life matters evolve and our economy has also evolved over the years.
We have obviously had some dips along the way, but each time, we managed to get back on track. The last two major ones were the closure of a couple of manufacturing plants in the first half of the 2000s and the impact of the severe international economic recession in 2010. In both cases we weathered the storm. Today we are experiencing robust growth and there are very few who give a second thought or show any concern about the current status of the economy.
However, in such a situation, one should always ask the question: “What can we do better?”
Yes, there will come a time when technology will take over most of the jobs that we currently do today... This means that we will be doing different jobs
It is important that we make sure that those trees that are producing economic wealth are nurtured and looked after to keep on producing this wealth. We also need to grow new trees, to give us new fruit as current activity reaches the end of its life cycle.
Either option poses a dilemma that we can do little about. The level of economic activity that has been generated in the last years as well as currently is greater than what can be sustained just by the Maltese population on its own. In fact the number of non-Maltese workers in our labour force is increasing. There are certainly some disadvantages related to this phenomenon; but we should keep in mind that without these foreign workers, we could not have produced the economic growth that we did.
My understanding is that there are several companies who would like to grow their activity in Malta, but cannot because they cannot find enough suitable people. In such a scenario we need to ask the question: “Can we raise our productivity levels?” This would imply producing a higher output for each hour that is worked. To use the hackneyed expression, it does not mean having to work harder but having to work smarter.
We often speak of better quality jobs that pay higher salaries. This does not happen automatically. We need to work for it. A country does not raise productivity levels but businesses operating in that country do. It is a task that has to be dealt with at the micro level.
As a country, we can provide incentives for this to happen and we can provide a human and physical infrastructure that supports the raising of productivity levels. However, if it does not happen at the level of the enterprise, it does not happen at all.
Two prerequisites are required. First there needs to be a better appreciation of knowledge and the deepening of skills. I write this because in the leadership training that I deliver, I have met too many persons who are afraid of knowledge and skills development. They perceive it as a threat to their job. Thus they are not that keen to share their knowledge with their colleagues and neither are they very keen to help their employees to develop and deepen their skills.
The second element is eliminating the fear of technology. Again, I feel that there are still many who fear that technology will take away jobs, rather than release resources that could be put to better use. Yes, there will come a time when technology will take over most of the jobs that we currently do today. This does not mean that we will not have enough jobs. It means that we will be doing different jobs. We have already been through the experience where we no longer do many jobs as we used to do them in the past. This trend will continue and if we try to block it, the process will steamroller over us.
I strongly believe that the need to raise our productivity levels should be placed as one of the country’s main economic priorities. It will require a culture change. However, if we do not tackle this issue with some urgency, our economy could well become a victim of its own success.