Over the years, successive governments have sought to incentivise businesses to invest. In this regard, foreign investors have always felt that Malta does not represent in any way a sovereign risk, as the environment has always been one which is generally favourable to investors. There have been spells (some 40 years ago) when there was a negative attitude towards the services sector and when government sought to take on the role of the entrepreneur. Thankfully these were not long-lived.

As part of this strategy, there have also been specific initiatives to assist small- and medium-sized enterprises. Since Malta became a member of the European Union in 2004, these initiatives have increased and have involved significant amounts of money. The government recently launched another two such initiatives.

The importance of SMEs for the Maltese economy can never be understated, given that these are generally Maltese-owned and many provide goods or services in support to the larger companies. For example, exporters cannot thrive unless there is a vibrant transportation sector capable of transporting their goods to their markets.

On the other hand, it is recognised that such companies do not enjoy economies of scale and at times may not have the access to finance that they may wish to have, have not consistently managed to penetrate foreign markets and have only rarely been a cradle for research, development and innovation.

As a country, we need to become engaged with small- and medium-sized enterprises

The excellent performance of the Maltese economy over the last years (I keep reminding people that the last severe recession we had was more than 30 years ago) has created employment to the extent that we now depend on foreign labour to continue growing our economy. Yet, we cannot get complacent and we need to ensure that new sources of growth are developed.

One of these sources of growth is in our own backyard and it is our small- and medium-sized enterprises. I am quite certain that the Malta Development Bank, expected to be set up by the government in the coming months (the draft law is on the agenda of Parliament) will take this into consideration.

To add to this I would like to mention an initiative of the Borsa Italiana, which forms part of the London Stock Exchange group, in collaboration with the European Investment Bank, the Italian government and other entities.

The initiative, which is called Elite, seeks to provide SMEs access to the network of players that operate around the Stock Exchange – investors, banks, associations, professional advisers, etc. By doing so, SMEs are put in contact with large quoted companies. These serve as best practice to follow in the management of the enterprise and in delivering excellence to customers.

The ultimate objective is to prepare such companies for a listing on the Stock Exchange or for financing through private placement, enabling them to broaden their horizons.

This is the solution that an important player in Italy, Borsa Italiana, has identified. The solution has now also been applied in the City of London. We need to find our own solutions, possibly learning from the experience of other countries.

As a country, we need to become engaged with small- and medium-sized enterprises. Last Saturday I attended an event of Junior Chamber and I felt energised by the vibrant environment created by young, upcoming entrepreneurs. They are not there simply to be supported but as a launching pad for our next stage of development.

We need to view SMEs as the training ground for tomorrow’s business champions of our economy.

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