The European Commission has published the second edition (the first one was published in 2010) of the Regional Competitiveness Index that seeks to assess the level of competitiveness in the various territories in the EU. It is based on the Global Competitiveness Index developed by the World Economic Forum and covers a range of issues, including innovation, macroeconomic stability, business sophistication, labour-market efficiency, higher education, quality of institutions, infrastructure (including digital networks) and measures of health and human capital.

This index is a most-useful tool as it seeks to provide information on the areas to which regions within the EU should give priority to enhance the competitiveness of business operating within their territory. In large countries there can be large variations between regions.

However, smaller countries, including Malta, Cyprus and the Baltic States, have been considered as one entity. It is interesting to note that the top-10 list includes three regions in Holland, three regions in the UK (the UK fills three of the top five spots), and one region each in Germany, France, Sweden and Denmark.

Malta features in the 193rd place from a total of 262 regions. As could be expected, there are some areas where Malta performs well and others where it performs dismally. It’s overall score is of -0.569, while the score of the most competitive region (Utrecht in the Netherlands) is 1.358. The score of the least competitive region (which is located in Bulgaria) is -1.481, thereby indicating our country is somewhere two-thirds down the list. Malta scores best in the innovation sub-index, while it scores best in the efficiency sub-index. In fact, it is this latter index that pushed Malta down in the overall standings. The score of the basic sub-index hovers around the average.

The efficiency sub-index includes three elements – market size, labour market efficiency, higher education/training and lifelong learning. Understandably, Malta scores very badly in terms of market size – it is an element that is totally outside our control. It also scores very badly in terms of higher education/training. The main reason for this is the low percentage of persons aged between 25 and 64 who have been in higher education. We are essentially still paying for the mistakes committed 30 years ago and which we had started to address in the late 1980s. We get an average score for labour market efficiency. It is not higher mainly because of the low level of female participation in the labour force.

Malta scores well in the area of health, education, business sophistication and technological readiness, but not so well in innovation and infrastructure. The scoring related to institutions and macroeconomic stability hovers around the average. From an overall point of view, we are placed 20th from 27 EU member states. Luxembourg is not included in the results. Although we are quite proud of ourselves in terms of how we have managed to weather the international financial and economic crisis, we still feature behind countries such as Cyprus, Hungary, Poland, Estonia and the Czech Republic.

I believe that there is one key message from all this. We have made a number of important achievements. However, the road ahead is still difficult and long. If I were to use airline jargon, we are a good economy class, but we still have a long way to go to become business class. It is this thought that we should focus our attention on, in terms of management of the economy.