There is a great deal of talk about start-up businesses, especially when a very successful one is in the news. For example, this week the internet company Yahoo was sold to Verizon for $4.4 billion. Yahoo was once a start-up company and for a while it was a household name as a web portal and search engine. It has been less so recently, especially in Europe where Google made its mark.

Yahoo was one of those dotcom start-ups that mushroomed in California, US, in the 1990s. There were many (and I mean many) like it. Some were very successful (maybe not without pain), some were moderately successful, while many others failed. However, even those that failed left their mark. Some developed innovative products or services, while others were even more pioneering through inventions they made.

The dotcom start-ups were probably the most familiar to us because of the big hype around them. In effect all economies seek to encourage start-ups and the growth experienced by some of them in the 1950s, 1960s and 1970s are a reflection of the success of these start-ups. Some became world leaders in their field and in Malta we have welcomed some of them over the years. Companies like Metallform and Prominent come to mind.

The issue about such start-ups is they are probably riskier ventures than investment in well- and long-established companies. And that has to be accepted. For this reason they should be given more help.

We need to start appreciating and understanding the beauty of start-ups. They could represent the next growth spurt of our economy

The help they require would range from financial assistance for the purchase of fixed assets, financial assistance for working capital, advice on certain aspects of the business, etc.

In several countries this assistance does not necessarily come from the state but may be provided by financial institutions in the form of venture capital. In fact, venture capital companies predate the US dotcom start-ups.

This is why start-ups are not a phenomenon of today but have been an important pillar of national economies and of the world economy as a whole. Possibly, nowadays, start-ups are facing more challenges than they used to in the past because competition is stiffer. Therefore the issue of assistance to start-ups is becoming topical again. The strategy of the European Union to combat unemployment includes providing assistance to start-ups and ensuring that there is more economic space for them to operate in.

In Malta, the reality is that we have dabbled with assistance to local start-ups. Over the last decades (yes, it has been decades) there have been various initiatives to encourage and support start-ups. I do not believe that they have left the positive impact intended.

There could be a number of reasons for this, such as the attitude (not the lip service that we pay), which we have towards start-ups. We do not accept that there could be a very high failure rate, but the one that makes it will be enough to justify the money spent on those that failed.

We may have been more comfortable to grant assistance to projects that were proposed by established entrepreneurs than by an up-and-coming one. Or we may have been too uncomfortable with innovation.

The irony is that we have provided some form of assistance to self-employed tradesmen (not that they did not deserve it) and not to young entrepreneurs with bright innovative ideas. It is this element that probably proves the lack of adequate support we have been willing to provide to local start-ups over all these years.

We need to start appreciating and understanding the beauty of start-ups. They could represent the next growth spurt of our economy.

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