Malta hit the bottom rungs for digital entrepreneurship in an index that ranked 35 European cities on support for start-ups and scale-ups.
Malta languished at the bottom as a result of its last-place ranking on business environment, entrepreneurial culture, mentoring and managerial assistance, and non-digital infrastructure.
The European Digital City Index compiled by Nesta, a UK-based charity, took into consideration various factors. Although the index refers to Valletta, the data covers all of Malta. Malta ranked 35th in the start-ups index, which analysed the ease and ability for digital ideas to be turned into business ventures.
The country advanced two places to 33rd in the scale-up index, which looked into the factors that enabled established businesses to grow.
The index acknowledges that Malta’s small size inevitably leads to a dearth of start-ups
Nicosia, the capital of Cyprus, the other Mediterranean island in the EU, ranked 26th in both indices.
The index acknowledges that Malta’s small size inevitably leads to a dearth of start-ups.
It notes that there are various government-led initiatives to promote start-ups but argues that “to make a more significant impact” on the start-up scene, Malta would have to stimulate its entrepreneurial culture and “significantly improve” the ease of starting and doing business.
The ease of doing business has repeatedly featured as problematic in successive World Bank reports with bureaucracy being singled out as an area of concern.
But the digital city index found that access to finance to be “better than expected”.
“There is a variety of locally based funding options for Maltese start-ups or those seeking to set up their business on the island, even if many of the options available are debt-based,” the report said.
However, it noted that angel and seed capital – investment funds used to encourage new companies – could be improved, potentially by connecting the nascent Malta angel network with the European Angels Fund. The best ranking Malta obtained was for digital infrastructure, 14th overall.
Starting a digital business
| Top five | Bottom five |
| London | Zagreb |
| Amsterdam | Riga |
| Stockholm | Sofia |
| Helsinki | Athens |
| Copenhagen | Valletta |
Growing a digital business
| Top five | Bottom five |
| London | Rome |
| Stockholm | Zagreb |
| Amsterdam | Valletta |
| Helsinki | Athens |
| Copenhagen | Sofia |
Problem areas
Business environment
Variables included in this category swung from cheap office space – a positive aspect in which Malta placed second – to a very negative high bureaucracy and a lack of public sector information.
Entrepreneurial culture
The study found that entrepreneurial spirit was viewed negatively and there was little appetite for risk. It did not help that there were very few highly successful digital companies.
Mentoring and managerial assistance
Access to mentors and the lack of availability of early-stage assistance pushed Malta down the index. A middle-of-the-table placing for networking and mentoring events was not enough to pull Malta off the last rung though.
Non-digital infrastructure
This criteria includes two transport-related variables for which the country occupies the bottom two rungs.
kurt.sansone@timesofmalta.com