Business agenda issue 32 autumn by Malta Business Bureau

Agenda Business

ISSUE 32 Autumn 2017 NEWSPAPER POST

The official publication of the Malta Business Bureau

Deal or no deal? Analysis of the latest Brexit negotiations

In this issue: Parliamentary Secretary Aaron Farrugia on the latest round of EU funds and how it will affect businesses | After nine years at the helm of Victim Support Malta, whatâ&#x20AC;&#x2122;s next for Dr Roberta Lepre? | The rise of the sharing economy and its impact on the way business is done | Business & EU News

BUSINESSAgenda | Autumn 2017

Cover Story

Reversal of

Fortune

Prime Minister Joseph Muscat’s comments about the possibility of Brexit not happening were picked up across Europe and have garnered different reactions between Brexiters and Remainers. Could this however be the case? In light of Theresa May’s Florence speech, Marie-Claire Grima speaks to former EU commissioner Tonio Borg, Stefano Mallia (EESC) and David Zahra (MBB) about how realistic it is to expect Brexit’s wheels to stop turning, and what will happen if they don’t.

n July, Prime Minister Joseph Muscat stated in an interview with Dutch newspaper de Volksrant, “I’m starting to believe that Brexit will not happen”. While UK Prime Minister Theresa May has insisted that Brexit will happen, what seemed like a casual comment made headlines all over Europe. Mrs May’s own

speech in Florence in September confirmed that Britain will likely opt for an ‘adjustment period’ that will bind it to EU rules up until 2021. But is there really any chance that the wheels of Brexit will grind to a halt, or is it a case of locking the door after the horse has bolted?

“Nothing is impossible in politics and a week is indeed a long time,” says Tonio Borg, former Minister for Foreign Affairs and European Commissioner for Health and Consumer Policy. “There is no doubt that the current Government in the UK is committed towards an exit from the EU in deference to the result

“The only possibility for a reconsideration of this decision could occur if the UK strikes a hard Brexit deal and Theresa May’s Government would suffer a solid parliamentary defeat in Parliament in the approval of such deal, which would lead to an early dissolution of Parliament and the return of a Government elected on a platform of remaining in the EU.” Tonio Borg of the consultative referendum held in June 2016. Even the Opposition Labour Party in its Manifesto for the June 2017 snap elections declared that it would respect the people’s will as expressed in the previous years. I believe that come what may, the UK will be outside the EU come March 2019. The only possibility for a reconsideration of this decision could occur if the UK strikes a hard Brexit deal and Theresa May’s Government would suffer a solid defeat in Parliament in the approval of such deal, which would lead to an early dissolution of Parliament and the return of a Government elected on a platform of remaining in the EU; but there are so many ‘ifs’ in this possibility that I would

say that it is just wishful thinking at the present moment.”

fits just as if it were still part of the European Union.”

“At the moment, I don’t see anything that suggests that Brexit will not take place,” says Stefano Mallia, Vice President of the Employers Group within the European Economic and Social Committee (EESC), and a member of the Brexit Advisory Group of the EESC. “Yes, there is uneasiness about the possible outcome, but it is too early and too close to the referendum and general election results to realistically talk about the possibility of Brexit not taking place. One must also keep in mind that the very political survival of the current UK Government depends on its ability to deliver a ‘good Brexit’.”

Mrs May has argued in favour of a twoyear adjustment and implementation period, during which time Britain would continue to abide by EU laws, honour its budget obligations and maintain access to the European Single Market (ESM). She also stated firmly that ‘no deal’ was better than a ‘bad deal’, which indicates that even the threat of a ‘hard Brexit’ would not deter the UK from leaving. “In the case of a so called ‘hard Brexit’, the sectors within our economy that could be hit range from manufacturing, to tourism, to financial services,” Mr Mallia says. “In my view, the social partners together with the Government should undertake a detailed assessment of what the possible implications could be. The Government has been proactive in setting up a Malta-UK business promotion task force of which I form part, the remit of which is to offer solutions to UK-based companies that wish to continue having access to the EU Single Market after Brexit. However, we still lack a good grasp of what the possible impact could be on our economy if a hard Brexit had to take place. Here I could imagine that Malta’s social partners through MCESD could undertake such an exercise.”

Mr Mallia adds, however, “this is not to say that the Brexit process is moving along smoothly – far from it. In the immediate aftermath of the referendum result, the whole Brexit situation was characterised by confusion. More than a year later, the whole process is engulfed by even more confusion. While the EU, or more precisely, the 27 EU member states through the chief negotiator Michel Barnier have been very clear as to how they see the process moving ahead and which are the main milestones that need to be achieved for the negotiations to proceed to their final destination, the UK Government seems to have not yet come to terms with what it means to leave the European Union and effectively become just another country outside of the EU. So far, it seems to be moving along in the belief that the UK can strike some unique deal which will allow it to maintain a number of bene-

“We need to remain optimistic that the EU and UK will come to an agreement on future trade relations ahead of the March 2019 deadline – it is in the interest of both as it will provide much more legal clarity for the great volume of trade that goes on between the two – but in a worst-case scenario where no future trade deal is reached

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Cover Story

“So far, the UK seems to be moving along in the belief that it can strike some unique deal which will allow it to maintain a number of benefits just as if it were still part of the European Union.” Stefano Mallia

between the EU and UK, it will mean that the UK will start applying World Trade Organisation (WTO) rules,” MBB President David Zahra says. “This means that tariffs will be introduced and this makes the selling to UK business and consumers – and vice-versa – more expensive. Also, having to go through customs checks adds a new bureaucratic procedure. Considering the limited time there is for negotiations and that it is not in the interest of either party to go through this scenario, the EU and UK may agree on a transitional agreement that would govern the period until a new trade agreement takes effect, and thus present a continuation process for business. To this effect, the UK Government has commented that it would consider abiding with the conditions of a customs union for an interim period. From a Maltese business point of view, this is a welcome solution. But not much further has developed to this effect.” Taking a more blasé approach, Dr Borg says that even a worst-case scenario would not be the end of the world. “Trade would still be possible. However we have to prepare for a plan B. I do not think that tourism as such would be affected; however exports could decline if tariffs were to be introduced, even though there are restrictions in this regard even outside the EU.” While the fact that the UK will leave the EU will probably have a negative impact on both the country and the Union, the fact that Britain – home to the world’s foremost financial centre – is leaving the EU has led many to visualise an exodus of UK-based companies, particularly from the financial services industry, to avoid losing passporting rights to the European Union. However, Malta so far has not managed to attract too many companies that are keen to relocate. Why hasn’t any business turned up at our shores? “One has to address this topic with caution,” Dr Zahra warns. “First and foremost, UK companies are still closely monitoring the progress in discussions particularly on the issue of passporting. We are still relatively early in the process of negotiations with no foregone conclusions on this issue. Many companies may therefore decide to take their time before making concrete future decisions.” “Secondly, Malta operates in a highly competitive environment in this field

with other established financial centres that are also well positioned to attract business. This does not mean that Malta should not be on the forefront, but one has to understand that this is not a one-horse race. Finally, only recently has the Maltese Government established a Brexit Task Force that includes well-experienced public and private officials, tasked with positioning Malta and implementing a plan of action to promote Malta as an investment destination. Through this coordinated effort, one hopes this leads to more success in this area.” “We need an aggressive policy to attract both private corporations that feel that after Brexit they cannot remain based in the UK, as well as EU agencies,” Dr Borg concurs. “With regards to the latter, we need to team up with others. Applying for the seat of the EU Medicines Agency was important; however most EU states have done the same, and there is the need of a special team which negotiates with other member states. Even if we were to lose our bid for an EU agency, we need to negotiate with others regarding other agencies – EU or non EU – which Malta would be interested to host in Britain’s place.” Despite Brexit, the economic mood in Europe is improving, and most member states’ finances are in the best shape they’ve been since the crisis nearly ten years ago. The overall economic climate in Malta is even better, with a buoyant economy, de facto full employment and above-average rates of growth. Can momentum be sustained? “Malta is experiencing a growth above of the European average and this is of course welcome,” Dr Zahra says. “This growth however requires care to remain sustainable. The country has limitations in terms of human capital and infrastructure. We therefore need to ensure that Malta is more attractive to high skilled labour both for professional reasons as well as standard of living. This requires continuous investment.” “It also goes without saying that while consolidating industries that are performing well and aiding others that are struggling,” he cautions, “we need to forecast what the economy will look like and will require in the next ten to 20 years at the least. This way we can start working from now to create

“We need to remain optimistic that the EU and UK will come to an agreement on future trade relations ahead of the March 2019 deadline… but in a worst-case scenario where no future trade deal is reached between the EU and UK, it will mean that the UK will start applying World Trade Organisation (WTO) rules.” David Zahra the right environment and dedicate the investment required to cater for such industries – including regulatory frameworks, infrastructure, skills and technology.” BA

BUSINESSAgenda | Autumn 2017

Interview

“European funding is helping transform our society” Photo: DOI - Omar Camilleri

Parliamentary Secretary for EU Funds and Social Dialogue Aaron Farrugia talks to Manuel Zarb about EU funds and how they can help the Maltese business community, the role of social dialogue, and moving from the private sector to the Cabinet.

hir ty-seven-year-old politician Aaron Farrugia, elected for the first time in last June’s election, has been handed a significant responsibility. He is tasked with overlooking Malta’s use of EU funding and social dialogue, working within Helena Dalli’s Ministry of European Affairs and Equality. Dr Farrugia had previously served as Malta Freeport’s CEO, a position to which he was appointed in 2013.

Asked to discuss the EU funding options available to businesses, Dr Farrugia begins by outlining the objectives he is aiming to achieve by the end of the 2020 programming period. “We have three main objectives,” he says. “The first is fostering competitiveness through innovation and the creation of a business-friendly environment. The second is investing in our environment, sustaining an environmentally-friendly and resource-efficient economy. The third goal is the creation of opportunities through investment in human

capital, and improving the health and well-being of our citizens.” These objectives, he says, will contribute to improve citizens’ quality of life and create an environment which is conducive to economic growth and job creation. “The European Structural and Investment Funds are key to achieving these objectives. Other EU funding initiatives, particularly the Internal Security Fund, contribute towards improving the security of our citizens by improved border control. Malta is also benefitting from various centralised funds such as

Horizon 2020 which supports investment in research and innovation; the Connecting Europe Facility which supports investment in energy and transport, and ERASMUS+.”

funds to establish new businesses and to expand or diversify existing ones; we also provide grants for businesses that wish to sell, and to those internationalising their operations.”

He adds that this round of funding is designed around the needs of the business community. “Businesses will benefit from improved infrastructure such as an enhanced e-Government service, improved waste management, and improved TEN-T infrastructure. Meanwhile, SMEs will be able to apply for grants administered directly by a newly established division in my Parliamentary Secretariat. We are offering

On how funds will be used to increase the labour participation rate of specific groups – such as women, the elderly, and youths, Dr Farrugia refers to what is already being done. “Projects such as the Access to Employment Scheme already provide employment aid to enterprises in Malta and Gozo, to promote the recruitment of jobseekers who experience various challenges. The training aid framework scheme

“Social investment is not a zero-sum game, but a win-win situation, from which our society and citizens can benefit.”

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Interview “Economic efficiency and social equity should be pursued at the same time.” is intended to promote access to training to persons actively participating in the Maltese labour market, to enhance productivity, adaptability, and employability. Moreover, Government has allocated approximately 30 per cent of the European Social Fund resources to combating poverty and social exclusion.” On the Social Dialogue aspect of his portfolio, the Parliamentary Secretary asserts that this is now well-established in Malta. “In the last few years, we have seen our worker and employer organisations take a more informed and proactive role, as they’ve invested in strengthening their technical and administrative capabilities.” The social partners are all members of their counterpart European organisations, he explains, and many of them have a proactive attitude. “This gives them considerable exposure to global social dialogue. Through these affiliations, we also have better access to relevant information, which ultimately impacts the perceptions and decisions of local organisation leaders. I want to take this to the next level, and look at how we can work with partners to begin addressing some of the longterm challenges we face as a country, to ensure sustainable development for future generations.” Following the agreement on an increase in the minimum wage earlier this year, Dr Farrugia says that a fundamental transformation affecting the world of work means more attention must be paid to social dialogue. “New technologies are transforming the way

Photo: DOI - Kevin Abela

Photo: DOI - Clifton Fenech we organise work, increasing flexibility and cross-border mobility. Nowadays, more workers are working within the framework of atypical contracts (such as Posted Workers) and in new forms of dependent self-employment. While some may value the flexibility of this, seeing it as an opportunity to better reconcile family and work duties, others see the risk that their skills will become obsolete. Furthermore, blurring the boundary between work and home, and reducing predictability can mean new risks and new sources of stress for workers as unmonitored working time increases.” Whilst new business realities create opportunities, he emphasises, the priority must be social investment. “In a social market economy, we must ensure that those opportunities do not

“European funding is helping to transform our economy and I want all our citizens to feel the benefits of this latest round of funds.” lead to new vulnerabilities and inequalities, and to a lower awareness of rights. On the contrary, we must seek to strengthen trust and predictability between workers and employers. We must adapt in order to support more flexible ways of work, whilst ensuring adequate protection for both national and transnational workers. This is a key instrument for tackling social dumping. Social investment is not a zero-sum game, but a win-win situation, from which our society and citizens can benefit. Economic efficiency and social

equity should be pursued at the same time.” A crucial part of a sustainable economy is to make sure no one is left behind, Dr Farrugia says. “Our social market economy should provide opportunities for all, with decent jobs and sustainable, inclusive growth. The better working conditions are, the more committed people can be to economic success. Improving working conditions can enhance efficiency and productivity within the enterprise, and can boost competitiveness in broader terms. If we are to safeguard economic growth, we need to keep pace with change.” Some social dialogue issues, however, are more controversial. Among these are Government’s proposal to reintroduce annual leave for workers when public holidays fall on weekends, one which employers and trade unions have taken opposing views on. Asked how this sensitive topic can be resolved with respect to the competitiveness of Maltese business, the Parliamentary Secretary says that the Government has a mandate to deliver on its manifesto. “Given that workers and their organisations play a vital role in social dialogue, I believe participation to be the key formula in cooperation on labour issues in Malta. Participation is ensured through a variety of tools and methods such as discussions, negotiations, and consultation between social partners and the Government. It is important that the Government continuously shows its commitment in empowering social partners,” he asserts. “Promoting real and effective social dialogue is an important part of the effort to ensure decent working conditions. Social dia-

logue is a prerequisite for a competitive and fair social market economy. It is the core of our efforts in order to ensure that no one is left behind. Social partners have a key role to play in striking the appropriate balance between flexibility and security, and fostering competitive as well as inclusive labour markets.” On his transition from a role in the private sector to a Parliamentary Secretariat, Dr Farrugia says “it’s been a whirlwind first 100 days! Whilst I enjoyed my career in the private sector and gained valuable experience, getting elected to Parliament and appointed to Cabinet was the proudest moment of my professional life. I am immensely grateful to the electors in my district and to the Prime Minister for the faith and confidence they have shown in me. Given my keen interest in European and international affairs I am delighted to be working with Helena Dalli at the Ministry of European Affairs and Equality, and I am very fortunate to have such a wide-ranging and varied portfolio.” Dr Farrugia insists he’s tried to hit the ground running with an agenda for reform. “I don’t know how long I will serve in Government so it’s important to me to not waste a single day. My guiding principle is to deliver for future generations – this should be at the core of Malta's social dialogue agenda – working with partners to deliver systemic economic, environmental and social progress. European funding is helping to transform our economy and I want all our citizens to feel the benefits of this latest round of funds, so I want to ensure they are used in the most effective and efficient way to deliver systemic change.” BA

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Editorial Publisher Content House Group Mallia Buildings 3, Level 2, Triq in-Negozju Mriehel BKR 3000 Tel: (+356) 2132 0713 Email: info@contenthouse.com.mt www.contenthouse.com.mt

MBB CEO Joe Tanti

Tackling the STEM challenge A principal goal of Europe’s 2020 growth strategy is to ensure that the labour supply is equipped with the right skills. The right skills are needed to strengthen citizens’ employability and social inclusion. They are also crucial for enhancing innovation and business competitiveness. Whilst Malta retains one of the lowest unemployment rates in the EU, there is an extensive shortage of skills availability across all categories of employment. For this reason, businesses are facing recruitment difficulties, hindering them from reaching their full potential. At a recent conference organised by the MBB, the Malta Chamber of Commerce, Enterprise and Industry presented a Vacancies Survey which was carried out in the past weeks. This study – which analysed the demand for workers in different sectors of employment for the next five years – clearly shows that there is a considerable need for workers skilled in Science, Technology, Engineering and Mathematics (STEM). This demand is expected to increase, making STEM skills essential to sustained economic growth. Yet there is low interest in STEM-related subjects. Why? During the proceedings of the conference, it was noted that at school, the language used by teachers to describe STEM subjects often under-

sells the opportunities presented by them. STEM-related subjects are taught in a way that do not appeal best to students. However, what can be done in this regard? Teaching methods should be modernised and updated. Teachers must be constantly aware of technological developments and for this reason, re-training and upskilling of educators are crucial to ensure a high-quality level of education. Inviting industry professionals as guest lecturers is also an excellent opportunity to enhance the students’ learning experience. The learning experience within the classroom should also be given priority. A good case in point raised during the conference is the Esplora Interactive Science Centre at Bighi. Esplora portrays science as being a fun subject, one which instigates creativity. This concept, depicting STEM as enjoyable subjects, should be communicated in the classroom and translated into teaching practices. Esplora also offers a great opportunity for study-visits, allowing students to

experience hands-on workshops and entertaining science shows, making science relevant to their everyday lives. Moreover, it was determined that the earlier students acquire these skills, the better the prospects they will have for continuing their education and their future career in this area. From an early stage, students should thus be supported in making informed decisions about the education and career pathways that are available to them. This does not only apply to educators, but also to family members who often serve as role models. Rather than solely focusing on the supply of STEM skills, one should also assess the role of businesses in the face of this Europe-wide issue. Businesses should be willing to offer apprenticeships, give lectures or invite students to visit their premises. These are all vital steps to ensure that on the one hand, students obtain firsthand experience of their prospective careers, while on the other hand employers obtain immediate access

to a pool of skills which are highly in demand. All in all, STEM subjects need to be given an image overhaul in order to encourage more people to join the sector. Without taking this important step, STEM will remain a challenge, hampering economic growth and holding back a workforce eager to be productive.

The MBB – through the Go&Learn Network co-funded by the Erasmus+ programme – has set up two international circuits with the aim of engaging students with a number of local companies working in the STEM sector. One of these circuits focuses on ICT for Business, Leisure & Commodity whilst the other focuses on Diversification in Gastronomy: Moving towards a Healthier & Niche Market. For more information about the conference, I invite you to see page 27.

Malta Business Bureau Cornerline, Level 1, Dun Karm Street, Birkirkara BKR 9039 Tel: (+356) 2125 1719 Email: info@mbb.org.mt infobrussels@mbb.org.mt www.mbb.org.mt

The Malta Business Bureau is a nonprofit making organisation acting as the European-Business Advisory and Support Office of the Malta Chamber of Commerce, Enterprise and Industry, and the Malta Hotels and Restaurants Association. The MBB has two offices, the Head Office in Malta and the Representation Office in Brussels. Editor: Joe Tanti Deputy Editor: Martina Said Design: Nicholas Cutajar Editorial Team: Ana Vella, Sarah Abdilla, Daniel Debono, Sarah Micallef, Jo Caruana, Marie-Claire Grima and Manuel Zarb Brand Sales Managers: Matthew Spiteri and Petra Urso Advertising Sales Coordinator: Marvic Cutajar Business Agenda is the quarterly publication of the Malta Business Bureau. It is distributed to all members of the Malta Chamber of Commerce, Enterprise and Industry, all the members of the Malta Hotels and Restaurants Association, and to all other leading businesses by Mailbox Distribution Services, part of Mailbox Group. Business Agenda is also distributed by the Malta Business Bureau to leading European and business institutions in Brussels.

BUSINESSAgenda | Autumn 2017

Case Study

Photo: DOI - Clodagh Farrugia O'Neill

“Newly launched Business First will be proactive in helping businesses” Business First, a joint venture between Malta Enterprise and GRTU, has just been launched as a separate Limited Liability Company. This is great news for Maltese SMEs and the national business climate, Malta Enterprise COO Marika Tonna explains to Manuel Zarb.

n 25th September, Business First Limited was launched by Government, with the entity opening its doors in Mriehel and welcoming clients the following day. This entity, the single national point of contact for businesses, has the stated aims of offering services, information and assistance to potential entrepreneurs and SMEs, determining the needs of business, and lobbying for more simplification and improved business-related services offered by Government. Prior to the launch, Business First was a unit within Malta Enterprise – but the new set-up as a limited liability company is a big improvement, says Malta Enterprise Chief Operational Officer Marika Tonna. “The new Business First will be proactive, rather than reactive. Although we always helped businesses who came to meet us, the old Business First didn’t have an extensive outreach programme, and offered very limited Government services. This new core allows us to have a much wider scope.”

Meanwhile, she explains, the Business Development Malta Unit within Malta Enterprise will continue to give more focused services to the core clients of Malta Enterprise, working in the area of simplification of procedures, supporting innovative start-ups, supporting enterprise through various schemes, and supporting research and development, transnational networking and artisans and crafts persons. “This Unit will be working hand in hand with Business First for the simplification of processes. The objective is to challenge existing Government procedures which are relevant for businesses and to simplify them through a holistic and consolidated approach, which involves all the respective Government entities, with the ultimate objective of developing appropriate e-forms.” Crucial to the Business First project is the fact that it is a joint enterprise between representatives of business and Government. “Business First Limited is a joint venture between Malta Enterprise and the GRTU, which has over 7,000 members coming from 12,000 different business outlets, rep-

resenting a very large group. These include retailers of goods and services, contractors, distributors, wholesalers and independent technical and professional service providers. Having them as an integral part of Business First will keep us on our toes, and give us direct access to information on what is hindering business growth, especially for SMEs.” This, she argues, will allow Business First to quickly recognise what the needs of various businesses are and what changes they would like to see.

Marika Tonna “The set-up allows the GRTU to lobby against excessive bureaucracy, whilst Malta Enterprise represents the Government and the drive to improve Government services. Ultimately Business First is set up to serve the needs of business, with small businesses having a say on how the entity is going to be run. The Chairman of Business First is in fact Paul Abela, who is also the President of GRTU, and the GRTU’s involvement allows us to find concrete solutions to problems through better cooperation with the private sector,” Ms Tonna asserts. “Government, mean-

while, has clearly given importance to Business First, which was one of the 12 KPIs it announced last May to make the public sector more efficient.” A self-made entrepreneur, Idroplast Manufacturing Managing Director Doreen Cutrona will also be on the entity’s Board of Directors to represent the private sector. A crucial success factor of Business First will be the presence of various Government departments and entities, which will send officers to help businesses with specific queries. “Our front desk officers are constantly being trained on Government services, benefits, initiatives and rules and regulations for businesses. But they will never be as informed as the officials who work in the department. For businesses that have very specific issues that need to be solved, we will have a system in place whereby Government officials from different departments will be available on a rotating basis. If we realise that a business person needs specific help, we will set up an appointment for him/her at Business First.” A number of entities such as the VAT Department and the Planning Authority are already represented, and the aim is to have all departments relevant to businesses present at Business First by the end of next year. Business First is also a part of the servizz.gov network, which will allow businesses to keep track of their request for a service, complaint or call for assistance. “Every entry will be logged into a system and given a timeframe, according to pre-established criteria, determining when the

“Ultimately Business First is set up to serve the needs of business, with small businesses having a say on how the entity is going to be run.” actual service must be implemented. The new set-up is much more focused than the previous one and the timelines are much more stringent. We will know in real time which clients have been served, and which are still waiting for service delivery so we can address their query as quickly as possible.” The new set-up will also offer more Government services, Ms Tonna continues, with the aim of eventually offering all Government services through a dedicated business portal, which is a work in progress, or through Business First. Business First will also be offering several new services – for instance, the front desk staff will guide potential entrepreneurs on how to register a business. “There are certain general rules, such as that all businesses have to be registered with the VAT

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Case Study

“We will have a system in place whereby Government officials from different departments will be available on a rotating basis.” Department, but then there are specific requirements for particular businesses such as those in the food and beverage industry which need to be explained. Moreover, our staff will also be able to provide information to start-ups about any Government benefits that they would be eligible for, such as Malta Enterprise’s Micro Invest Scheme, European Regional Development Funds for business and so on.” Start-ups will also be informed about how they can register their business online, with assistance for those that are not computer literate. Topping off all this, Ms Tonna says, will be the several information sessions held with Government entities, educational institutions and the GRTU, and a revamped 144 helpline, with dedicated staff to resolve queries as quickly as possible. One of the aims of setting up Business First was to improve Malta’s business environment. Asked about Malta’s placement in the World Bank’s Ease of Doing Business ranking – a very poor 76th place overall, last in the EU, and 132nd in the ‘Starting a Business’ category – Ms Tonna says this is a very sore point for Malta Enterprise. “Despite the poor ranking, Malta is doing very well economically, and according to the official figures of the NSO, business births have almost doubled from 2011 (6,159) to 2016 (11,032); so

Photo: DOI - Clodagh Farrugia O'Neill

“The new set-up is much more focused than the previous one and the timelines are much more stringent.” really, it cannot be that bad. We feel that there is room for a lot of improvement in setting up a business, and we have already achieved results in this area. Changes have already been made, such as consolidating the process to start a business for the self-employed into a single online form, and the revocation of the trade license regime.” As a result, a business can register as a limited liability company and start operations following four procedures, which

take a maximum of three days to complete if the process is done online. “Two things, however, work against us. First of all, the World Bank sends questionnaires to both Government officials and the private sector – so if the private sector does not report these improvements, then they will not be recorded by the World Bank. There is also a onesize-fits all approach which discriminates against us. The case study that

deals with obtaining construction permits, for example, is the building of an industrial property in the capital city – which in our case is Valletta, a walled city which is a world heritage site. Had the case study been different, for example building a warehouse in the most populous city which in our case is Birkirkara, there would be significant improvements to the performance, and it would represent a factual case study for such developments in Malta.” On a final note, I ask Ms Tonna whether the first initiative towards developing Business First was an effort by Malta Enterprise or the GRTU. “Whilst both Malta Enterprise and the GRTU wanted to work towards the project, the biggest champion of the project

was Principal Permanent Secretary Mr Mario Cutajar,” Ms Tonna answers. “He really believes in improving Government services, and that Business First is one of the ways of doing so. It’s been challenging meeting the deadline for the establishment of Business First – servizz.gov, but we’re glad to say that we’ve managed to do so.” BA Centru Joseph Grech, 2nd Floor, Cobalt House, Notabile Road, Mriehel. www.businessfirst.com.mt

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Society Photos: Jan Zammit

The Protection of Law From running her own consultancy firm to leading Victim Support Malta, lawyer Roberta Lepre sees value in the ways our laws can protect us. She talks Jo Caruana through her milestones thus far, as well as her plans for the future.

oberta Lepre is wellknown in Maltese law circles, and beyond. Charismatic and forthright, she is especially renowned for her dedication to victims of violence, as witnessed in the nine years she spent at the helm of NGO Victim Support Malta.

Dr Lepre is very passionate about the law and what it stands for but, looking back, recollects how she nearly veered into another career altogether when she enjoyed working in the media in her late teens and early 20s. Nevertheless, at the last minute, she decided to sign up to the law course at the University of Malta and hasn’t looked back since. “I love being a lawyer,” she says, “although there are a number of things I find challenging about the profession, including the traditional idea of what a lawyer is supposed to be. I find many lawyers don’t work towards compromise much and believe their approach needs to soften – their point may be right in principle, but that point may not be conducive towards coming to an agreement, which is so important.” That said, Dr Lepre loves the fact that the law can give people hope if it’s implemented properly; that it can help them find a solution and give order to life. “If people made their own laws there would be chaos – so the law

“The law provides information on what is expected from society. What we need more of now is the proper enforcement of that law.”

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Society the job and feel we have achieved so much, but it was also challenging to run an organisation on such limited resources,” she admits. “We wanted to be able to do so much more, and that was frustrating at times.”

“This can be very useful when recruiting people to work in your organisation or to improve community engagement,” she explains, “and the idea was well received by a number of companies.” Nevertheless, Dr Lepre soon found herself with a different opportunity ahead of her when she joined NGO Victim Support Malta in 2008. “This is an organisation that strives to support victims of crime in the most holistic way possible,” she says. “From legal help to emotional support, it’s a one-stop-shop for anyone who has been the victim of a crime – whether that’s a robbery, a sexual crime, or domestic violence, and regardless of whether the victim is a man or a woman.” Dr Lepre’s years at Victim Support Malta were spent raising the profile of the organisation and developing its projects. One key milestone was the setting up of the Sexual Assault Response Team in 2013 in partnership with the Government. “This team brings together related Government services, namely medical, police and social work, to offer follow-up services to the victim. The services of a lawyer and psychotherapist are also provided,” she explains.

“There were many successes that I am very proud of, but a simple ‘thank you’ from one of the victims was more rewarding than anything else.” provides information on what is expected from society. What we need more of now is the proper enforcement of that law.”

Like most of us in our careers, Dr Lepre has a passionate love-hate relationship with elements of what she does, and this has inspired her to work within dif-

ferent aspects of the profession. She began working in generic law before joining the Commission for Equality, where she started to focus on equality, discrimination and diversity issues, and also developed expertise in applying for and managing EU-funded projects. From there, she set up niche consultancy firm Weave Consulting, and her original idea was to promote the concept of diversity in the private sector by helping companies to ensure that they are compliant with equality legislation.

Beyond that, the NGO also pushed for the adoption of the Victims’ Rights Directive – a new directive that gives victims of crime certain rights, including the right to be protected, the right to information, the right to receive support, and the right to undergo a risk and needs assessment. “There were many moments and successes that I am very proud of, but a simple ‘thank you’ from one of the victims for helping them and making them feel better was more rewarding than anything else,” Dr Lepre says. Now, having dedicated nine years to the organisation, she has decided to move on. “I loved so many aspects of

On a personal level, Dr Lepre has decided that it’s now time to focus on her own legal career, which she says she has neglected to a certain extent, and is now excited to get back into. “I thought I was going to have a break over the summer months but I didn’t,” she smiles. “I jumped straight into my new role, focusing on normal legal practice, family law and commercial law.” Dr Lepre has returned to Weave Consulting, which she is running as a sole practitioner, and she is now looking at growing it into a wider corporate social responsibility (CSR) consultancy practice. “I think Malta is more ready for that now than it was ten years ago,” she says. “Companies are more receptive to issues of diversity and CSR, and they can see the benefits of incorporating them.” With that in mind, Dr Lepre is now looking forward to forging a number of different collaborations and to working with interesting people in different parts of the law. “I have worked in one area for a long time and am now keen to experiment in different fields and to see where it takes me.” BA

“Companies are more receptive to issues of diversity and CSR than they were ten years ago, and they can see the benefits of incorporating them.”

BUSINESSAgenda | Autumn 2017

Case Study Photos: Alan Carville

Connecting the

Mediterranean Martina Said catches up with Vincenzo Onorato, owner of Tirrenia and Moby – represented locally by SMS Group – during a short stint on the island, to find out what the shipping company has in store for the Maltese market.

fter an absence of around three decades, Italian passenger and freight maritime transportation company Tirrenia has made a return to Malta’s shores, operating regular routes between Malta and Catania. The Onorato Armatori group, under which Tirrenia operates, provides regular ferry services from mainland Italy to the islands of Sardinia, Corsica, Sicily and the Tuscan archipelago, the Tremiti islands, now Malta and the Baltic Sea. I meet Vincenzo Onorato, owner of Onorato Armatori – the group that owns Tirrenia, Moby, Toremar and St Peter Lines – together with his son and Vice President of the group, Alessandro Onorato, to find out what brought the company back here after such a long hiatus. “I wish that people could see the Mediterranean Sea with my eyes – although it is immensely vast, it can all be connected, and the company has made it its mission to develop a massive global offering for passengers and freight to cross the Mediterranean,” says Mr Onorato. “Malta is at the centre of the Mediterranean basin, and it is crucial to have good connections to and from Malta which in turn can service the whole region. I’m constantly reminding my children to stay positive – sooner or later, the North African region will be in a position to trade again, at which point Malta will be in a key position to connect Europe to North Africa.” Mr Onorato asserts that two particular situations in Malta, which he believed desperately needed to be changed, attracted Tirrenia back to our shores. In the context of Malta’s strong and fast-growing economy, the facts that there was a monopoly by one company, Grimaldi Lines, on truck and freight operations locally, and that there was no regular ferry connection between Malta and Catania, called for a plan of action.

“The fact that there was no regular freight line between Malta and Catania was quite unbelievable, and we wanted to address it. However, we’re still very much in the early days of our operations in Malta – we resumed ferry services in June this year, and this is only the beginning. Currently, the majority of traffic to Sicily is via Pozzallo not Catania, but once we build our traffic up again, we would like to have two ferries leaving day and night, one from Catania and one from Malta,” says Mr Onorato. “What we’re introducing here is quite basic, and simply looking to connect Malta and Sicily.” This year, both Moby and Tirrenia registered strong growth, with the most notable increase registered in the Sicilian market. “Our primary market is Sardinia, which remained stable on the passenger front, but we’re looking to strengthen our presence there on the freight front. Another important market for us is Corsica, where we registered a ten per cent increase in transportation of passengers and freight. The biggest increase, however, was registered in the Sicilian market – up to now, compared to 2016, freight transportation on the Genoa-Livorno-Catania-Malta route increased by 25 to 30 per cent.” Albeit offering a similar service, Mr Onorato explains that Tirrenia and Moby are two distinct products. Moby, which distinguishes between passenger and freight ships in its 22 shipstrong fleet, is a family-oriented ferry service with various entertainment options on board, including bars, games rooms and shops, and various cabin options for a comfortable overnight voyage. Tirrenia, meanwhile, caters for all markets, and has both passenger and freight ships in its fleet of 18 units. Some of the vessels from both lines cover the same routes, while other routes are unique to Tirrenia or Moby.

“Malta is at the centre of the Mediterranean basin, and it is crucial to have good connections to and from Malta which in turn can service the whole region.”

BUSINESSAgenda | Autumn 2017

Case Study

“Wherever we go in the world, the first thing we do is look for the right partner, and SMS Group was the best partner for us in Malta.”

“Local traffic from Malta to Sicily was only being serviced by Virtu Ferries before we commenced operations, but our services are very different, as the trips with Virtu Ferries are fast, whereas Tirrenia offers an overnight service with an approximate voyage of nine hours. Tirrenia crosses between Malta and Catania five times a week, and the plan is to offer a daily service in due time, with two trips on Sundays,” says Mr Onorato. Asked how Tirrenia’s services can help strengthen trade relations between Malta and Sicily, Mr Onorato asserts that it’s still early to say, having only commenced the service three months ago. “However, we were surprised to receive a strong demand for passenger traffic, not just freight, between Malta and Catania. From the start, the intention was to use a ro-ro vessel for this voyage, which is a cargo vessel that can carry vehicles and drivers, making it a very simple, basic ship that is not designed for passengers. As we pick up

the pace locally and continue to test the market, we will consider adding a passenger ship with a significant truck capacity to cater for these demands. There is a great interest from Sicilians to visit Malta – it is an attraction primarily because it’s beautiful, but also because it’s easier for Sicilian clients to visit Malta for entertainment rather than to travel to northern Italy.” Tirrenia and Moby are represented locally by SMS Group of companies, a partnership which Mr Onorato said was the right choice from the start. “Wherever we go in the world, the first thing we do is look for the right partner, and Simon Mifsud, Managing Director of SMS Group, was the best partner for us in Malta,” he asserts. “For the time being, the goal is to consolidate the service we’re offering between Catania and Malta. This service has been missing locally for a long time, so we need to rebuild traffic gradually and make the market competitive again. It will take time, but we have the winter

“For me, sailing is an addiction – I started sailing at the age of five and racing when I was 13. I am now 60 years old, and still love sailing more than anything.” months ahead to work on improving the service currently being offered, with the aim of adding another cargo or passenger vessel as well.” Mr Onorato’s love for the sea extends beyond his profession alone, highlighted by his undying passion for sail-

ing. In 2016, the veteran skipper and his team, Mascalzone Latino, won the Rolex Middle Sea Race after missing the top spot by just nine seconds the year before. “For me, sailing is an addiction – I started sailing at the age of five and racing when I was 13. I am now 60 years old, and still love sailing more

than anything. This year, we will not come back to Malta for the Rolex Middle Sea Race, but we will be taking part in the Hong Kong to Vietnam race in October, and the Sydney Hobart yacht race in December. At the end of 2018, we will return to race in Malta. The way I see it, I’m a sailor first, then a sportsman and lastly a ship owner. Sailing is much more fun than work – and anyway, now it’s my children’s turn to work, papa has to sail.” BA

BUSINESSAgenda | Autumn 2017

Culture

Preserving the past for the present and future the use of Heritage Malta’s properties has introduced it to new and different audiences.”

n 2016, Heritage Malta, the national agency for museums, conservation practice and cultural heritage, welcomed a whopping 1.28 million visitors to its sites, reaching an all-time high despite planned closures of a number of sites, including the Hal Saflieni Hypogeum, the Palace State Rooms and the opening of Fort St Angelo to the public for only two months. In 2015, the number of visitors admitted to the agency’s museums and sites reached 1.1 million, with the most popular attractions being the Ggantija Temples in Gozo, the Palace Armoury and State Rooms, Hagar Qim and Tarxien Temples. This year, there are plans to top the record figure achieved in 2016. Noel Zammit, Head of ICT and Corporate Services at Heritage Malta, asserts that, compared to last year, 2017 so far has been a slower year. “However, we’re aiming for an increase of six per cent over 2016 by the end of the year. The slow-down was largely caused by the closure of two major sites, the Palace State Rooms and the Hypogeum, due to commitments related to Malta’s EU Presidency and conservation works respectively. Both sites have now been re-opened to the public.” Mr Zammit says various factors contribute to visitor numbers, a main one being inbound tourism, but not just. “Record figures in inbound tourism directly correlate to admissions to our sites,” he explains, “as well as the quality of our product, which has improved drastically over the past eight years. Other important factors include increased investment in marketing initiatives, arrangements with external stakeholders, the strategic positioning of our product in global markets through target marketing, value adding initiatives and improved pricing strategies.” The agency also seeks to continually invest in all sites and museums, especially those that attract the most numbers, in order to enhance return visits and continue improving online ratings

on sites such as TripAdvisor, Facebook and Twitter. “A heavy online presence is a must in today’s day and age. Engaging with audiences has never been so effective with online tools and destination websites. We have a following of over 17,000 fans on the agency’s Facebook page, and have another page for almost every museum and site we manage,” he adds. “Earlier this year, we concluded a collaboration agreement with Google wherein most Heritage Malta museums and sites are integrated with a Street Maps service and can be visited virtually.” Besides appealing to foreign visitors, Heritage Malta has also undertaken initiatives recently to up the number of local visitors, namely through the introduction of the student scheme, whereby every primary school child received a membership card that enables them to visit Heritage Malta museums for free and unlimitedly, any time they wish, while also giving a 50 per cent discount to the parent or guardian. “We have also opened our doors to event hosting such as weddings, receptions, product launches, conferences, corporate team building activities and more,” says Mr Zammit. “We’re working on the organisation of thematic dinners, where we present a culinary experience by offering dinners and recipes from different periods in his-

tory linked to the location of the event. This has been particularly successful at the Malta Maritime Museum, where we offered 16th and 18th century menus, and Heritage Malta is now looking towards other venues including Fort St Angelo and Fort St Elmo. Additionally, the agency’s Education Department plays a vital role in bringing more locals to our museums, by increasing awareness and knowledge among the scores of school children we host every year – over 40,000 – through edutainment and ‘learn as you play’ exercises.” By making sites of such historic value available for corporate and national events, some of Malta’s most astonishing venues get to be enjoyed by the public in an alternative setting, but, on the downside, they also risk getting exposed to unfavourable conditions and, potentially, damage. Mr Zammit asserts that the overarching objective of Heritage Malta is to safeguard its cultural assets and make them accessible for the enjoyment of the public. “In itself, this statement may be interpreted as contradictory, since to ‘safeguard’ or ‘protect’ an asset would require making it as inaccessible as possible. However, safeguarding our heritage and making it accessible is a very costly business that cannot rely solely on admission fees. This is just one of the reasons why the agency has opened up some of its venues for special events and functions. Also, varying

Mr Zammit states that the agency takes all the necessary precautions to preserve its assets, in line with its primary objective to safeguard and protect Malta’s heritage. “We do not allow or take any risks when renting out a venue, and every necessary precaution is taken into account when an event is organised. In fact, every museum and site has different contract terms and conditions, which have been customised for each particular location. For instance, no naked flame equipment is allowed at most venues, no fireworks are allowed and, in some cases, such as the Grand Salon of the National Museum of Archaeology, we do not allow food and drinks, but offer an alternative adjacent hall where refreshments can be consumed.” The operational expenditure of Heritage Malta is approximately €12 million annually. Mr Zammit explains that Government injects circa €5 million per year, and the agency generates more than €5 million from admission fees. The rest is revenue generated from business development, merchandise and publications sold in Heritage Malta museum shops, and the rental of the agency’s sites and museums as event venues. “We engage as much as possible with corporate firms for potential patronage and sponsors, and so far, the agency has managed to secure over €250,000 from donations through the citizenship programme. This has proved to be a very important source of income to

embark on projects which otherwise would have been kept on the back burner due to expenditure prioritisation and opportunity cost. Projects underway through these funds include the 3D documentation of the Grand Salon at the National Museum of Archaeology, the funding of storage and showcases for our Natural History collection, the Bells and Chimes project at the Malta Maritime Museum, the restoration of various artefacts including the furniture that will be displayed at MUZA in 2018, as well as the implementation of educational tools using mobile technology and augmented reality at the Inquisitor’s Palace, among others.” Mr Zammit highlights that business development initiatives in themselves can be a significant source of revenue where, apart from rental of venues, Heritage Malta will also be investing in the promotion of patronage programmes and ‘adopt an artefact’ type of sponsors. “These are all business development initiatives which can generate revenue to fund special projects. For instance, Arts Council Malta launched a Tax Deduction scheme through which a private entity can become a ‘patron of the arts’. Companies giving financial donations to organisations engaged in arts and culture can benefit from a 150 per cent tax deduction of up to €50,000 on donations given. I would like to see more incentives of this kind to entice more support towards preserving our unique cultural heritage.” BA Heritage Malta Head Office, Ex Royal Naval Hospital, Triq Marina, Kalkara. T: 2295 4300; E: info@heritagemalta.org; www.heritagemalta.org

BUSINESSAgenda | Autumn 2017

MBB News

Business Agenda News Updates 4-6th September MBB Executive completes Employers Young Professionals Academy Course IN Turin MBB Executive Business Support Ana Vella participated in the Employers Young Professionals Academy (EYPA) programme organised by the International Training Centre of the International Labour Organisation (ITC-ILO) in Turin. The programme consisted of three sessions, beginning with the first in May which focused on being the voice of business at a national and EU level, the second in July was centred on current economic debates in Europe, whilst the closing session in September paid special attention to social dialogue and industrial relations. Throughout the course, participants obtained a thorough understanding of the various challenges faced by business organisations and the expectations of their members whilst also training on advocacy and lobbying techniques within the context of the EU.

1st September MBB Senior Advisor relocates to MBB Brussels office Mark Seychell, the MBB’s Senior Advisor on Internal Market and Legal Affairs has relocated to the MBB’s Brussels Office. Mr Seychell has recently completed a period of secondment with the Permanent Representation of Malta to the European Union for the purposes of the Maltese Presidency of the Council of the EU as a Senior Policy Officer within its Competitiveness Unit. Mr Seychell has chaired the Competitiveness and Growth (Internal Market) and Consumer Affairs and Information Working Parties, and succeeded in negotiating a unanimous General Approach on the Proportionality Test Directive, as well as an agreement with the European Parliament on the Consumer Protection Cooperation Regulation.

19-20th September MBB participates in ZEST, the Tech event in the Med

He will now be joining EU Affairs Manager Daniel Debono in MBB’s Brussels operations. Following his secondment with Government for the 2017 Maltese Presidency of the Council of the EU, Mr Seychell will continue to build strong working relationships with individuals in key positions within the European institutions, particularly MEPs, in order to lobby the position of Maltese business on critical dossiers through advocacy work.

Malta’s start-up conference, ZEST, returned this year with an even more exciting line-up of leading local and international speakers, wider international participation, and unprecedented networking opportunities. ZEST is the main gathering for tech start-ups based in Malta where technology disruption is central to the discussions. It also serves as an excellent opportunity to attract foreign players to experience the island.

Together, Mr Debono and Mr Seychell will be steering the MBB’s lobbying strategy with the European institutions and pushing legal amendments on legislative proposals, in the interests of Maltese businesses.

MBB Executive Business Support, Ana Vella and MBB Executive EU Funding Marija Elena Borg attended this year’s edition which took place on 19th and 20th September at the Radisson Blu Golden Sands Resort. The event attracted over 500 participants

mainly comprising CEOs and founders, investors, talent, influencers and professionals. The event was a unique opportunity for MBB to be represented and network amongst a cosmopolitan crowd of locals, expats and fly-ins. Discussion topics ranged from business foresight, investment, scaling strategies and organisational culture to the impact of emerging technologies on established verticals such as finance, content and hospitality. MBB was also represented at the ZEST satellite event on the evening of Tuesday 19th September, which targeted niche communities, giving more space for specialist discussion and networking. ZEST Malta 2017 was organised by the Malta Communications Authority (MCA) in collaboration with various other public entities and stakeholders.

BUSINESSAgenda | Autumn 2017

MBB News

12th September

Bridging the Skills Gap in the STEM Sector

A half-day conference on ‘Bridging the Skills Gap in the STEM Sector’ was hosted by the MBB in collaboration with the Malta University Holding Company (MUHC), on Tuesday 12th September at the Malta Chamber of Commerce in Valletta. The participation of high-profile experts, together with industry professionals and entrepreneurs contributed to a fruitful discussion on the subject matter. This conference formed part of MBB-University’s initiatives under the EU-funded Go&Learn Network, which provides access to an international catalogue of training seminars and company visits for students and educators. In so doing, the project promotes a better understanding of the business environment and the potential for networking. In his opening address, Malta Chamber President Frank V. Farrugia stated that the current “lack of STEM skills present in Malta’s labour market is significantly hampering our progression to an innovation-driven economy.” He emphasised that whilst new technologies are emerging at an unprecedented rate, “a worrying lack of synchronisation” exists between the education system and the sectors related to Science, Technology, Engineering and Mathematics. University of Malta Rector Prof. Alfred Vella, MCAST Vice-Principal Ing. Vince Maione, Education Ministry Consultant Dr Alexander Grech and Malta Chamber HR Committee Chair Catherine Calleja all participated in the first panel debate. This discussion – chaired by the Head of the National Skills Council, Prof. Joseph Cilia – specifically focused on identifying the causes of the existing STEM skills gap. One of the mentioned challenges was that students are exposed to STEM subjects at a relatively late stage in their academic journey. In addition, the means used to depict and teach

STEM subjects are often not as creative and innovative as they should be. A special emphasis was given to the concept behind the Esplora Interactive Science Centre at Bighi, and how it should also be reaching students within the classroom. The second panel discussion featured Malta Life Sciences Park Director Ing. Joseph Sammut, TAKEOFF Business Incubator Manager Ing. Joseph Bartolo, Altaro Software Co-founder David Vella and ELTY Food Founder Jeanette Cameron. The panel, chaired by MBB CEO Joe Tanti, discussed the role of the business sector in the face of this Europe-wide issue. It was determined that the role of internships and work-based learning is crucial to ensuring that students obtain a first-hand experience of their prospective careers, before they start seeking full-time employment. In his closing address, MBB President Dr David Zahra stated that by 2025, the “demand for STEM professionals is expected to grow by around eight per cent”. He encouraged the private sector, stakeholders and authorities to give priority to the STEM sector by forming strategic partnerships that seek to “upgrade our education and training systems in line with the fast changing economic and societal environment.” For more information on the Go&Learn+ project, co-funded by the Erasmus+ Programme, contact Marija Elena Borg on T: 2125 1719 or E: mborg@mbb.org.mt

BUSINESSAgenda | Autumn 2017

MBB News

13-14th September

MBB organises Design Thinking Workshops On the 13th and 14th September, MBB hosted project partners for the Horizon 2020 DesignShots project in Malta for a twoday workshop held at the Malta Chamber of Commerce. DesignShots is being supported by the European Commission within the H2020 framework and is the result of collaboration between Business and Cultural Development Centre (KEPA, Greece), Malta Business Bureau (MBB, Malta) and Luxinnovation (Luxembourg). The one-year project has brought partners together for a second time as part of its peer learning activities which are realising the goals of this project through the transferring of good practices with the single aim of designing and creating a Design Options Paper that will serve as a guide to implement better practices to support innovation by way of design. Once published, the guide will be disseminated to serve as a source of inspiration for innovation agencies in the respective partner countries. By way of this guide, the partners will highlight a set of practical design methods to encourage and add value for SMEs when they approach the practice of innovation by creating new products, services, and customer experiences. Design is a key driver in creating new products and services that are attractive to customers, and can make a business stand out among the competition. However, the lack of design management skills is a significant barrier to the wider adoption and integration of design into Europeâ&#x20AC;&#x2122;s businesses. Although some European countries are world leaders in design, others lack a robust design infrastructure and design capability. It is now time for this

systemic gap to be tackled and for both the public and private sectors to manifest the notion that design drives the innovation process and sharpens industry competitiveness. The project is thus tackling the challenges that local SMEs face to integrate Design Driven Innovation and become more competitive and resilient. To achieve the overall project objectives, in the coming months, the project partners will pilot a support service (DesignShots) about Design Driven Innovation to SMEs in the involved territories. Five SMEs in each region will use the DesignShots service that is a one-hour diagnosis in the form of a consultation regarding the design needs of the enterprise. MBB collaborated with the Valletta Design Cluster for day two of the workshop and organised a joint Design Thinking workshop for the DesignShots project partners and the Design4Innovation project with local stakeholders. The thought-provoking event welcomed the participation of Dr Leonie Baldacchino, Director of the Edward de Bono Institute for the Design and Development of Thinking, who delivered a presentation on how creativity and design thinking could be applied by businesses to lead organisations to innovation. The workshop, attended by both project partners and stakeholders, including representatives from the University of Malta and the Arts Council, was conducted by certified LEGOÂŽ SERIOUS PLAYÂŽ (LSP) expert facilitators Dr Carlo Spellucci, Change Management master, and Mattia Michelangeli, Start-Up mentor.

Dr Spellucci began by presenting the LSP methodology and how it could be used effectively to help business support organisations with their clients. This was followed by a hands-on practical experience with LSP tools. The session served as a best practice example of business support by using design thinking methods, feeding into the key objectives of both the DesignShots and Design4Innovation project, and allowing participants to build on their contributions of design-thinking within the innovation-driven process of enterprise. At the close of the workshop, a number of concrete ideas and results were hashed out; all of which will be available in the Design Options Guide once published. BA For more information, contact Ana Vella on T: 2125 1719 or E: avella@mbb.org.mt

BUSINESSAgenda | Autumn 2017

Case Study Photos: Alan Carville

Helping

businesses transform David Galea, Chief Executive Officer at BEAT Limited – a specialist firm providing integrated business transformation solutions – talks to Sarah Micallef about the firm’s origins, service offering and what makes BEAT stand out in a competitive market.

“

BEAT stands for Business Excellence in Achieving Transformation,” CEO David Galea explains as he looks back on the firm’s origins in 2007. Set up in response to a growing need in the market to help companies manage their change transition during periods of growth, BEAT assists with the different processes, structures and systems required to make the leap. Since starting out, Mr Galea affirms, “we have sought to become the leader in Malta in the provision of business transformation solutions, striving to help client companies reduce their total cost of operations, and become more competitive in their own sector.”

By 2010, BEAT had penetrated the UAE market, and in 2012, the firm developed an alliance with Informa – the world’s

breaks down the services offered in relation to this area as falling within the scope of business transformations, project incubation and implementation. “As far as business transformations are concerned, we are aware that one rarely gets a second chance at turning a business around, and therefore our job is to help clients get it right the first time,” he says, explaining that this is done by identifying, developing and implementing the fundamental changes which will enable an organisation to cope with evolving markets. “As a result, their business will benefit from improved profitability and enhanced shareholder value. Our service portfolio in this respect includes the laying out of strategic blueprints and the formulation of performance manage-

“We have sought to become the leader in Malta in the provision of business transformation solutions.” leading player in the conference training and exhibition market. “Through this alliance, BEAT continues to provide training to an extensive suite of clients in the UAE. Our search for partners of international repute has since led to other alliances, including with TUV Nord from Italy, the Houston Intercontinental Chamber of Commerce, Prime Advantage in the UK, and Auraportal in Spain,” Mr Galea maintains, adding that in 2013, BEAT branched out into project management and incubation, primarily in response to the lack of proper management discipline evident in many projects which were being implemented around the island. Speaking of BEAT’s service offering, the CEO explains that the firm’s core expertise lies in the provision of integrated business process management services, as well as portfolio, programme, project and change management. “In layman’s terms, we essentially help companies to become leaner in their operations, and manage their projects in accordance with time, cost and quality objectives. We also assist companies in prioritising and maximising the return on investment on a range of programmes,” Mr Galea explains. Among BEAT’s areas of specialisation is business optimisation – a primary niche area in which they have proven themselves time and again. The CEO

ment systems, as well as the provision of organisational and business process design capabilities,” he affirms.

BUSINESSAgenda | Autumn 2017

Case Study Meanwhile, BEAT’s project incubation services put the firm’s extensive experience and expertise at the service of their clients, to help them develop and leverage ideas into pragmatic business concepts. “These services encompass the whole cycle of this process, from concept origination to determining the project’s technical, economic and financial feasibility, as well as its commercialisation,” the CEO explains. Finally, for any project undertaken, BEAT are on hand to guide and support clients in implementing measures to achieve the long-term sustainability of their organisation. “Whether our clients require hands-on support to implement and manage change, or to maximise the value and impact of their project and programme investments, we will direct our experience and expertise towards ensuring that these deliver the desired business results,” Mr Galea says. Asked where the company’s strength lies, the CEO cites the team’s dedication to supporting clients in leveraging and realising equity value from their business activities by adopting a holistic, customised and personalised approach to every project or assignment. “Over the past years, we have developed a reputation based on our commitment to provide dynamic, innovative business solutions. These solutions are designed to support our clients in improving their overall performance, and helping them reach their strategic and tactical objectives,” he maintains. “We have found that our clients greatly appreciate the high level of innovative strategic thinking we put on the table, complemented by practical advice tailored to organisations’ financial and operating realities. We regularly receive feedback complimenting us on our ability to manage change and to infuse the right mindsets to encourage change to take place, among other things. Clients have also pointed out our strong technical, analytical and yet pragmatic approach in resolving oper-

“One rarely gets a second chance at turning a business around – our job is to help clients get it right the first time.” ational issues, particularly in streamlining critical processes and achieving process integration,” Mr Galea continues, adding that although the firm leads and implements the various projects it undertakes in conjunction with company owners and management, “we place considerable attention on the transfer of knowledge and expertise to ensure ownership and the longterm validity of our work.” Speaking of his own experience, Mr Galea reveals that his own baptism of fire came when he first started out, working for a Big Four company, before moving to the Office of the Prime Minister, where he was involved in the restructuring of major public organisations. Later high-profile appointments included those of Head of Strategy and Knowledge Management at Malta Enterprise, and the role of General Manager responsible for Financial Control at Air Malta plc. He also served as Non-Executive Chairman for Mount Carmel Hospital in Malta. In the United Kingdom, Mr Galea was involved in a variety of project management initiatives, including the development of international project management standards for a global oil and gas company, the development of a business case for the consolidation of plutonium contaminated material into a single site, as well as the setting up of

a Programme Management Office for a major telecommunications company. However, he believes it is his involvement in business transformation, project management and performance management assignments that set him on the road he eventually undertook with BEAT, particularly in key BPR and Change Management projects at Maltese blue chip and best-in-class organisations engaged in the utilities, ICT and financial services, as well as in the public sector. On the other hand, Mr Galea’s partner and the company’s COO, Joseph Micallef, is an engineer by profession, with a penchant for guiding organisations along the road leading to operational effectiveness, value-adding activities, and customer-centric,

high-quality performance through business excellence processes. His career, originating in manufacturing, involved his engagement along a very broad spectrum of industrial processes, which later expanded to encompass the services sectors. “Within the manufacturing industry, Joseph has occupied various senior management roles in research and development, quality management and health and safety. His corporate career developed primarily through the medical devices industry, and later within the high-tech electronics industry. Meanwhile, his consultancy experience started off with an experimental project in 1999. Since then, it has developed into a full-time professional passion that has seen him successfully undertake a broad portfolio of projects, both locally and overseas,” Mr Galea explains, adding that his partner also has a strong background in providing coaching or mentoring services, designed to facilitate the establishment of effective, value-adding and quality-driven business processes within organisations. “A regular speaker and facilitator at a number of training seminars, workshops and conferences, he has trained hundreds of middle-management level and executive management delegates in Malta, Egypt, the UAE, Oman, Kuwait and Saudi Arabia.” Turning his attention to the local landscape, I ask BEAT’s CEO how the industry in Malta has changed since he first started out. Maintaining that what drove BEAT initially was a passion for excellence in helping client companies cut down their costs and improve their operations, Mr Galea explains that at the time of BEAT’s inception, the consulting industry in Malta was relatively immature, with a market size of around 100 million Liri. “It was a period which saw a number of large-scale IT projects mushrooming around the island, and a growing acceptance of integrating ERP (Enterprise Resource Planning) solutions. At the same time, however, most of these projects were IT-led with

limited importance being given to the changes in the business model,” he says. Nowadays, given the increased competition from abroad – particularly since Malta joined the EU in 2004 – as well as a change in the ownership structure of companies and the handover of operations to the younger generation, BEAT’s CEO believes that there is a growing acceptance of managing change as a profession. “Importance also started being given to engaging outsiders to help in the shaping of new and improved processes. Today, with technology revolutionising many businesses, the demand for process improvement and project management is set to increase significantly, and will become increasingly recognised as a fundamental service. Just as in the early 2000s industry embraced technology specialists, we have seen – and are likely to see in the future – a growing recognition for the need for more business process specialists.” Meanwhile, looking towards the future for BEAT, Mr Galea explains that the aim is to expand its global scope of operations and become the most internationalised advisory firm in Malta. “We aim to achieve this by developing our business processes in line with international best practices, by seeking international recognition such as ISO certifications, and by investing extensively in the training of our staff members, who are our strongest champions and ambassadors for growth. We are constantly striving to develop a customer-centric organisation by achieving growth, without losing that personal touch with the customer which has defined our modus operandi since day one. Finally, we will continue exploiting opportunities for further partnerships and joint ventures in the international scene with a view to gaining a wider reach on the global market,” he concludes. BA www.beatconsult.com

BUSINESSAgenda | Autumn 2017

Business

Streamlining the

process of doing business in Europe While the European Single Market offers countless international opportunities for businesspeople, navigating the laws of the land of 28 different countries is often challenging, costly and timeconsuming. Marie-Claire Grima speaks to Maria-Lyra Traversa, Communication Adviser in EASME who is responsible for the Your Europe Business portal, to find out how the portal can be helpful to EU entrepreneurs.

acilitating business has always been a central tenet of the European Union. Amongst the EU’s key achievements is the Single Market, which makes it possible for people, goods, services and capital to move freely around the 28 countries that encompass it, thereby creating new opportunities for citizens, workers, consumers and businesses that in turn translate into new jobs and sustainable growth for Europe. The freedom to conduct business is enshrined in its Charter of Fundamental Rights, and in many ways, it has always sought to boost innovation and entrepreneurship throughout the region. However, it’s undeniable that when doing business within a diverse collection of countries such as the ones that make up the EU, international entrepreneurs often face long and complicated administrative procedures, time-consuming reporting obligations, and difficulties in accessing credit, which are key components to starting up any kind of business.

There have been several attempts to address this issue, and the Your Europe portal was one of the solutions that emerged from discussions on how to make life easier for European entre-

preneurs. Your Europe was launched in February 2005, following a pilot phase that ran from 2003 to 2004. It has come a long way since, having undergone a series of revamps and structural changes. However, despite the changes, the idea has always been the same: to offer citizens and businesses across Europe practical information on their rights and obligations, and enable them to make the most of the European Single Market. “People who ran or wished to operate a business used to have to rely on searching through Directorate General websites, non-official websites and national government portals to find relevant information,” says Maria-Lyra Traversa, Communication Adviser within the Executive Agency for Small and Medium-sized Enterprises (EASME) who is responsible for the Your Europe Business portal. “This resulted in a lot of time wasted and the possibility of finding out-of-date information; it was one of the main reasons Your Europe Business was created.” The aim of the portal is to have a centralised place for information about EU rules and business procedures without it being loaded down with jargon or

technical terminology that’s difficult to understand. “The main emphasis is on starting up a business, taxation, cross-border selling, staffing matters and help finding finance and funding. It also offers access to financing opportunities and tools to find business partners across Europe,” Ms Traversa says. The portal links to help and advice services covering topics which include dispute resolution, issues with EU institutions, offices or agencies, and suggestions of where the user can find additional information. By filling out a contact form you can request support from local business organisations on cross-border issues. Funding a project is always a challenge, as is bringing the idea to the market, Ms Traversa says, as well as the delicate balancing act of keeping a healthy cash flow and knowing what to do and when to do it. “Those are probably the two main challenges for an SME starting up,” she asserts. However, migrants – be they EU citizens or non-EU nationals – face additional obstacles in these scenarios, from securing financial capital for starting a business, problems in recognising their qualifications, language barriers, limited knowledge of legal requirements and regulatory pro-

“The main emphasis of the portal is on starting up a business, taxation, cross-border selling, staffing matters and help finding finance and funding. It also offers access to financing opportunities and tools to find business partners across Europe.” cedures, and in many cases cultural differences and discrimination. “The portal has already proven very useful for businesses looking for information about VAT and taxation, especially in another member state. Finance and funding is also a topic that is highly sought after, and Your Europe Business signposts users to possible sources of loans and grant opportunities,” Ms Traversa says. “As they say, ‘knowledge is power’, and if you don't know where to look for information and advice then things are much more difficult, especially for those on a tight budget.”

Turning our attention to Malta, I ask whether the fact that the vast majority – over 80 per cent – of businesses in Malta are either micro enterprises or SMEs, can be seen as a positive or a negative aspect of Malta’s business landscape. “This is surely a positive thing, since SMEs have a lot of growth potential and by nature are flexible enough to adapt to a volatile economic environment,” Ms Traversa enthuses. “Let’s not forget that in Europe, SMEs represent over 99 per cent of all businesses, have created in the past five years around 85 per cent of new jobs and provided two-thirds of the total private sector employment in the EU.

BUSINESSAgenda | Autumn 2017

business

“In Europe, SMEs represent over 99 per cent of all businesses, have created in the past five years around 85 per cent of new jobs and provided two-thirds of the total private sector employment in the EU. Their role is definitely a crucial one.” Their role is definitely a crucial one!” She adds that there is a big difference between how different member states across the region encourage new businesses to start up. “I can say that some member states are working extremely efficiently with great incentives on offer to help SMEs reach their goals. There are also cases where such enticing deals aren’t on offer and the entrepreneurs may need to work harder to catch up.” Looking ahead, Ms Traversa says that the portal will continue to adapt depending on the changing policy and economic environment, and the new needs that emerge. “I would like to see the portal offer even more streamlined information in the future, including more information in all languages,” she says. “We always take on board the feedback received from users and are in close contact with EU and national policy makers so as to keep the information precise and up to date.”

Moreover, Ms Traversa says that in the coming months, the portal will be further developed as it will be at the core of the European Commission’s proposal for creating a Single Digital Gateway, which will ensure, among other benefits, centralised access for EU cit-

izens and businesses to all the information necessary when using their rights to mobility in the EU and full access to online procedures in a non-discriminatory way. The objective of the Digital Single Gateway is “to take full advantage of the benefits offered by new digital tools to help businesses seize the opportunities of a market of 500 million citizens to travel, work and study in any EU country.” The creation and implementation of a Single Digital Gateway will impose on member states an obligation to create full online access to the most important and most often used procedures, and includes a strong incentive to member states to adopt ambitious cross-border and national e-government strategies, so EU citizens and business can benefit

fully from the available technological developments. As a centralised portal that provides assistance on all issues related to doing business in Europe, the role fulfilled by Your Europe is one that is sorely needed. BA

“As they say, ‘knowledge is power’, and if you don't know where to look for information and advice then things are much more difficult, especially for those on a tight budget.”

BUSINESSAgenda | Autumn 2017

Helping companies innovate By Benson Bosman, General Manager, Apco Limited

a significant competitive advantage for your business. I am privileged to work in the industry that takes advantage of technological development to offer solutions that enable businesses to offer better service while they become more efficient. At Apco, we help companies to innovate by providing automation, self-service and security solutions in a variety of industries, including fuel retail, banking, retail and hospitality. Our offering is underpinned by key partnerships with world-leading suppliers such as Gilbarco Veeder Root, Diebold-Nixdorf, Gunnebo, Pacom, and Gemalto, among many others.

Today's ‘always on’ world changes the way we live and the way we run our business. Companies are competing not only on quality and price but also on the customer experience they deliver. Customers have very high expectations when it comes to convenience – giving customers added convenience means they can maximise their time. This in itself can prove to be

In the industry since 1987, we have gained the trust of a broad cross-section of businesses not only through the application of the most updated technology but also by continually investing in staff training. Our certified team can provide technical consulting, guide the integration process and offer premium support. With in-depth industry knowledge and experience, we bring diverse solutions and expertise to support companies take their business to the next level. T: 2144 5566; E: info@apco.tech

Business Update A scientific approach to skincare Dermo-cosmetics (or ‘cosmeceuticals’) are skincare products with bioactive ingredients that combine a cosmetic action with a dermatological one. Dermo-cosmetics originated in France and spread initially throughout Europe, which explains their historical predominance in these mature markets. The worldwide dermo-cosmetics market is still very young and is developing fast. The sector has doubled in just 15 years, jumping from 2.2 per cent to 4.4 per cent of the global beauty market. Western European markets represent 60 per cent of the dermo-cosmetics market and 22 per cent of the total beauty market. In Malta, doctors and pharmacists have been recommending dermo-cosmetics with increasing frequency to patients and clients with various skin types and conditions, since their introduction over 20 years ago. Dermatological expertise, rigorous clinical studies, and continuous product testing combined with a commitment to discover and develop new active ingredients ensure that consumers are provided with superior products renowned for their simultaneous high efficacy and extreme tolerance. Research, cutting-edge technology, and a constant drive for innovation are key. This is what truly differentiates dermo-cosmetics from other cosmetics. This scientific approach to skincare makes dermo-cosmetics the first choice for dermatologists, pharmacists and consumers alike to either manage a variety of skin conditions such as dry skin, eczema and acne, or to prevent sun dam-

age, wrinkles and hyperpigmentation. As a consequence, most dermo-cosmetic brands in the market are only available in pharmacies, so that consumers are offered a pharmacist’s expert advice to ensure the best possible use of these products. Back in 2004, Prohealth introduced the ‘dermo-cosmetic’ concept to Malta with the launch of La Roche-Posay in pharmacies, and followed this with pharmacy-exclusivity for another international market leader VICHY in 2007. The company’s highly-trained, professional La Roche-Posay and VICHY teams, share their expertise with doctors, pharmacists, and consumers alike, to ensure that people’s quality of life is significantly improved thanks to the best possible use of these remarkable dermo-cosmetic products. Mdina Road, Zebbug. T: 2338 5218; Fb: Facebook.com/prohealthmalta

The Commercial Courier – 70 years of Influence This year marks a major milestone for the Malta Chamber of Commerce, Enterprise and Industry. It is the 70th birthday of the Chamber’s official magazine and Malta’s largest and leading magazine – The Commercial Courier – first published in 1947. Throughout the decades, this prestigious publication has stood the test of time, and continues to stay ahead of the curve in all manners – aesthetically, editorially and commercially. According to Kevin J. Borg, Director General of the Malta Chamber and editor of the publication, The Commercial Courier is a valued tool in the Chamber’s set of reach-out instruments that allow the organisation to communicate with its members and the business community at large. “The Commercial Courier is 70 years old, and does not look the age at all. A lot of work and thought goes into keeping

the publication as young and fresh, vibrant and relevant as ever, with the strong involvement of our media partners, Content House Ltd.” President of the Chamber of Commerce Frank V. Farrugia believes that The Commercial Courier has always been a window onto the Chamber as an organisation, having consistently reflected the ambitions and values of its constituted body. And with the launch of the Chamber’s online portal last year, www.maltachamber.org. mt, the Chamber’s weekly newsletter, Chamberlink, and the online B2B directory, Mr Farrugia asserts that the organisation’s comprehensive cross-platform media and communications programme mirrors the demand for reliable and efficient online communication. “Following their most recent renaissance, the Chamber’s communication tools look

beyond the services of the Chamber and are designed to provide business people with the necessary information-based tools required in this day and age.” Mr Farrugia explains that the online products complement The Commercial Courier, which goes into further depth with interviews and features on current issues that characterise the country at the time. In 2005, The Commercial Courier was taken over by Content House Ltd, back when the publication was intrinsically pitched as an in-house publication of the Malta Chamber. “Gradually, we started to make substantial changes to it across the board,” says Content House Director Jesmond Bonello. “From a printing perspective, we invested in better-quality paper, full colour printing, and over time a perfect-bound, gloss laminated cover. The publication went through various rebranding and revamping exercises over the past 12 years – our philosophy is that no product can remain stagnant, and in this kind of industry, you either move forward or are pushed backwards by the highly competitive market. At Content House, we are renowned for working hard to push for change, risk and invest in a better product while pushing boundaries.” Mr Bonello adds that, while the magazine remains the official publication of the Malta Chamber,

Content House’s Editorial Department is fully plugged in and responsible for the content generation, while keeping in sync with the policies and values of the Malta Chamber to ensure consistency and credibility. Besides publishing The Commercial Courier for the past 12 years, and the Malta Chamber Annual Report for the past ten years, in 2016, the Malta Chamber and Content House reached a milestone agreement which enabled the two organisations to invest in a number of enhanced digital products. “Through this long-term agreement, Content House became the exclusive media partner of the Malta Chamber of Commerce and an overall bronze sponsor of the Malta Chamber. Together, we invested heavily to launch www.maltachamber.org.mt as Malta’s first business news portal, which also houses the Malta Chamber

official site. The business portal has really taken off, and in the first year has reached 300,000 people, as well as commercially.” Together with the www.maltachamber. org.mt, which is now ranked as Malta’s leading business portal, the two organisations also launched the B2B Digital Business Directory, which now features over 1,500 businesses, and re-launched a completely new version of Chamberlink, the official weekly digital newsletter of the Malta Chamber.

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Business Update

Harnessing Business Opportunity Gap The Maltese economy is doing well, better than most of its peers at EU level. It is difficult to pinpoint one particular factor as being the main driving force behind this momentum. Rather there is a symphony of drivers working together that are creating the economic well-being that we are witnessing today. However, if one had to identify one primary reason for the economic growth, it would probably be the fact that at present there is a positive synchronisation between the emerging economic sectors like financial services, pharmaceuticals and aviation, and the more conventional ones like construction, tourism and wholesale and retail, which all together are propelling the economy forward on all fronts. What is the bankâ&#x20AC;&#x2122;s role in this scenario? Bank of Vallettaâ&#x20AC;&#x2122;s leadership and market position in Malta means that the bank is inherently intertwined with the developments shaping the domestic economy. The Maltese bank has a responsibility to sustain the economy and its diversification. Effectively, this is done by supporting the promoters of the economy; be they entrepreneurs, family businesses, SMEs or corporates. The bank must ensure it remains relevant and supportive to clients, both personal and corporate. There is no hard and fast rule regulating how this is done, no off-the-shelf product that can be acquired. Every business needs to be evaluated on its own merits, along with the specific circumstances of the sector and its propensity to grow. Thus, the bank invests in its people and centres of excellence such as the BOV Business Centres and the Corporate Centre. Here professional people specialise in specific sectors and support their clients to expand their horizons through financing of working capital, asset-based or project finance. Financing, irrespective of its form, is tailored to suit the capabilities of the business, in a responsible and sustainable manner. Clients wishing to discuss their business needs are invited to contact their Branch and/or Business Centre. Alternatively, they may contact the bankâ&#x20AC;&#x2122;s Customer Service Centre on 2131 2020. Bank of Valletta p.l.c. is a public limited company licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta). Registered Office: 58, Triq San Zakkarija, Il-Belt Valletta VLT 1130-Malta Registration Number: C 2833.

BUSINESSAgenda | Autumn 2017

EU Policy

The Rise of the

Sharing Economy From providing accommodation to collaborating on car journeys, the strength of the ‘sharing economy’ is on the up. Jo Caruana asks three hospitality industry experts to give their opinions on how this is changing the way business is done.

hances are you have contributed to the sharing economy in some way. As a consumer, you may have used a website to book holiday accommodation directly with the proprietor, or have called a cab owned directly by the person driving it. As a service provider, you may have rented your home out to someone visiting Malta on holiday, or contributed to a crowdfunding campaign to help get a project off the ground. All of these aspects fall under the relatively-new concept of the collaborative – or sharing – economy, which has emerged rapidly across Europe. On the one hand, it has provided exciting new opportunities for citizens and innovative entrepreneurs. However, on the

other, it has created tensions between new service providers and existing market operators. Together, these challenges have led the European Commission to look at how we can encourage the development of new and innovative services, while also ensuring adequate consumer and social protection.

“More needs to be done to ensure a level playing field.” Kyle Borg “The collaborative economy has been developing at a rapid pace over the past few years, and entering into areas

which are not solely limited to accommodation but also related to areas such as transport and even catering,” explains Leslie Vella, the Malta Tourism Authority’s Chief Officer for strategic development and deputy CEO. “It has led to the development of new tourism products and services that have resulted in the strong demand for a category of consumers willing to experience such new products.” “The development and growth of the collaborative economy in Malta has also taken place in response to the record year-on-year tourism performances that have led to strong annual increases in tourism volumes. It is important to note that, in Malta’s case, this new type of demand has not grown to the detriment of collective

accommodation facilities, but rather as a seasonal alternative form of accommodation when demand for collective accommodation facilities is at its peak,” he asserts. “In fact, NSO data clearly indicates that, whereas demand for private accommodation (which incorporates facilities under the sharing economy) features the lion’s share of incremental demand being registered in peak season, the inverse occurs during the quieter months when there is more availability of collective accommodation facilities.” Kyle Borg, the Vice President for the Malta Business Bureau and a hotelier, believes that the collaborative economy is here to stay, and says it has brought more positives than negatives. “Primarily, it has created new business and allowed people to trade resources easily and quickly, without the bureaucracies of large conglomerates,” he says. “Online portals have given a boost to smaller independent hotels that could never build a brand internationally, and which can now piggyback off big brands such as Expedia and Book-

Kyle Borg ing.com. This has, in turn, given power to the hotelier, who is no longer at the mercy of the tour operator. Online portals have also enabled small hotels to have more cash in hand, increase their profitability and, in turn, has given them the courage and finances to better the product provided.” Having said that, Mr Borg stresses that a balance needs to be struck between online and traditional bookings, as “one cannot put all eggs in one basket. Big online portals can, at any

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EU Policy

point, demand higher commissions, which would be of detriment to all hoteliers, as it would eat away at the bottom line. Keeping a balance will ensure continuity and sustainability for the long term,” he says.

Christian de Barrin Meanwhile, HOTREC CEO Christian de Barrin, which represents the hotel, restaurant and café industry at European level, believes that the collaborative economy can certainly bring benefits to the overall economy – that is, if it is operated along clearly defined and reasonable rules. “It can only work if everyone knows their opportunities as well as duties,” he says. “Of course most service providers in the so-called ‘collaborative’ economy are usually of a small size, however one should not

forget that the highly-regulated hospitality industry is also composed of 91 per cent family-run and micro-enterprises, each employing less than ten people, and they also have to comply with regulations.” The collaborative economy has also already started contributing to growth and employment. “To growth it contributes by generating additional demand and spending,” continues Mr de Barrin, “and to employment it contributes in other ways, such as by becoming more and more professional. For example, ‘collaborative’ economy accommodation providers employ people to take care of their properties, like cleaning, changing bedsheets, welcoming guests, and so on. The current challenge is to bring these developments into regulated and calculable channels, reassuring employees, consumers, platforms, as well as the treasuries.”

At EU level, Mr de Barrin says that work is underway to allow for the more harmonised and reassured development of the collaborative economy. For instance, in June 2016, the European Commission issued a Communication that specified a better distinction between ‘regular/professional’ and ‘private’ suppliers to the market. “To follow-up on this work, the Commission is also looking at giving even more concrete guidance to its member states, and this should result in a more harmonised approach when it comes to regulating these types of activities at national or even at local level. HOTREC welcomes these efforts, but also believes that, due to the different circumstances in various European regions, national or local decision-makers should also have the freedom to adopt the most suitable rules that take local needs into account.”

“The collaborative economy can only work if everyone knows about their opportunities as well as their duties.” Christian de Barrin

“The MTA recognises the constantly-changing nature of tourism and is also in the process of updating its legislative framework to address changing needs in terms of tourism service provider classification.” LeslieVella

Mr Borg goes on to stress that more needs to be done to ensure a level playing field. “If a hotelier has invested millions in a property to ensure it meets health and safety standards and fire safety standards, as well as to guarantee it has the facilities that a guest wants, then this should be matched (even in part) by short-let sector accommodation. However, it has to be said that enforcement can be very difficult.”

Leslie Vella Agreeing, Mr Vella believes that everyone offering services to the tourism field should respect a number of parameters, including the need for fis-

cal regulation and to operate within the conditions of an operating license from the relevant issuing authority. “In the case of facilities providing accommodation services, the current regulatory regime operated by the MTA covers all conceivable types of accommodation, which means that anyone wishing to offer services under the collaborative economy can submit the relevant application for an operating license,” he says. “The MTA also recognises the constantly-changing nature of tourism and is also in the process of updating its legislative framework to address changing needs in terms of tourism service provider classification.” “Ultimately, it is an issue of ensuring a level playing field through the dual approach of reaching out and communicating legal obligations to unlicensed operations whilst simultaneously using a strengthened MTA Enforcement function. I believe the collaborative economy will continue to shape the future of the tourism industry, so we will need to find ways to keep making it work,” Mr Vella adds. BA

BUSINESSAgenda | Autumn 2017