ENTREPRENEURS, STARTUPS & SME’S 4 April 2019
Investing in people Minister for the Economy, Investment and Small Business of Malta, Chris Cardona writes on Malta’s strong economic growth
Malta’s strong economic performance has been lauded over and over again by various international entities such as the European Commission, the International Monetary Fund and prominent credit rating agencies. However, in 2019, after five years of rapid growth, we are undoubtedly dealing with new social, economic and environmental challenges, that are the natural tradeoffs of a booming economy. We believe a sustainable and thriving economy is not merely one with great statistics and more cash in the bank, but an essential part in the nation’s other developmental goals. Building economic resilience to shocks is more important than ever in today’s volatile context, with rapid technological change and geopolitical tensions and unraveling trade deals. Malta’s long history of colonialism, being under siege and having limited resources means being agile and adaptable is in our genes. I truly believe entrepreneurship is hard-wired into the Maltese psyche. Fundamentally the do or die of our economy is our ability to embrace innovation, however this goes beyond the limited idea of research and development. I think what the nation has yet to come to terms with is that we are truly in the fourth industrial revolution. If we had to go back only ten years let alone to when I was young - the way we educate, communicate, work – all dimensions of human life have changed and it
As a government we are striving to establish a modern economy driven by the new ideas of a whole roster of business people. A traditional economy produces known specified goods, whereas a modern economy dreams of what it might produce and tries to turn their dreams into reality. has changed the reality for millions of people around the world and the new opportunites are bountiful. Reinvention is neccessary to stay relevant, let alone staying competitive. A nation too runs the risk of becoming irrelevant, and the government is applying an economic vision that embraces innovation and building on our human capital. In the relatively short period since we became an independent state, a nation boasting no natural resources and limited connectivity, we have revolutionised ourselves into the country with the leading and fastest growing economy in Europe right now. It is no longer possible to rely solely on efficiency and cost- cutting for economic success. Agility and future-readiness are key in a changing world and in this globalized market, the main currency is ideas. We consistently try to be an administration that is
forward-looking and able to break away from the status quo. This encourages innovation at all levels for the best ideas to emerge. As a government we are striving to establish a modern economy driven by the new ideas of a whole roster of business people. A traditional economy produces known specified goods, whereas a modern economy dreams of what it might produce and tries to turn their dreams into reality. This can only be brought about by policy. When prejudices are shed, social freedoms expanded and more people are allowed to participate in political, economic and cultural life, the more people are happy to be a part of a society and encouraged to be themselves and to thrive. This is what makes up a dynamic society and economy. We believe investing in people is good for not only social, but economic outcomes.
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A success story Last year Business First was restructured as a servizz.gov hub for businesses and was re-constituted as a joint venture between GRTU and Malta Enterprise on behalf of Government. Business 1ST, also formed strong alliances with a number of other Government entities which are offering their front desk service from a one-stop-shop in Mrieħel. Marika Tonna writes.
Business 1ST offers a holistic service for start ups. It provides them with all the necessary information on the regulatory framework and any incentives they might be eligible to once they set up. Today self employed individuals have either the option to register their business totally on line or else go to Business 1ST whereby they will be guided on the process from how to reactivate the e-ID to registering with the Commissioner of Revenue (VAT and IRD), Jobs Plus and Social Security. Business 1ST employees are always ready to assist start-ups and established businesses continue to grow by facilitating the delivery of Government services and access to a considerable number of incentives offered by different Government entities. The Commissioner of Revenue (VAT and IRD) have relocated their front desk services for business totally to Business First and as anchor entitles that have not only attracted numerous clients to Business 1ST but they also serve as an example to other Government entities. An even more holistic service is offered to catering establishments as both the Malta Tourism Authority and the Environmental Health Directorate have an officer present at Business 1ST on a daily basis. Other entities, such as Identity Malta, the Customs Department, Measures & Support Division and Jobs Plus have a weekly presence at Business 1ST whilst we also have agreements with over 20 other government entities who offer their services from Business First upon demand. Our aim is to, together with servizz.gov and GRTU, change the traditional mode of service delivery. Another change we introduced is that, for once, start-ups are being given a holistic information service. Maybe in the past we underestimated the value of giving information to potential entrepreneurs. We always used to assume that certain businesses did not comply with the rules because they were dishonest. In reality empirical evidence, (and this is true not just for Malta) shows that, a considerable number of businesses that do not comply with government regulations, do not do so because they are not aware of these rules or else they find it too burdensome to apply. At Business 1ST we have a remarkable team of ‘generalists’
Today self employed individuals have either the option to register their business totally on line or else go to Business 1ST whereby they will be guided on the process from how to reactivate the e-ID to registering with the Commissioner of Revenue (VAT and IRD), Jobs Plus and Social Security. whose role it is to guide potential entrepreneurs and inform them of the rules that they have to comply with. Although Government’s policy is to push eservices as much as possible, and our big dream is that in the future entrepreneurs will be able to interact with Government completely online, we appreciate that face to face interaction is very important. We also
appreciate that during the delicate period of starting up, the last thing one feels like is filling in a number of forms to register a business. And it is for this reason that our pilot project was the implementation of a single form to register as a self employed individual. However, we feel that no matter how many eservices we introduce, the need for our front desk officers would always be there – not only for the locals who are starting a business for the first time in their life, but also for the numerous foreigners that are setting up shop in Malta. The results have been remarkable. In a year we had 32,000 client contacts – excluding holidays that amounts to 123 clients per day. This is an organisation, which until last year did not have that amount of clients in a whole month. Our success shouldn’t stop here. We intend to keep on improving and increasing the number of services offered from our offices and we intend to keep on listening to the representatives of business to see how we can facilitate doing business in Malta. Further information can be found on www.businessfirst.com.mt or by calling 144. Marika Tonna is CEO at Business 1ST
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2019 Sustainable Enterprise Award The aim of the Sustainable Enterprise Award is to recognise, promote and reward business organisations that have made a significant contribution to the different aspects of sustainable development. A sustainable enterprise can be defined as a company that applies sustainable practices in its entire base of activity; products, services, workforce, workplace, processes and management. Undoubtedly this is at times a challenge but ultimately yields positive benefits. The Award distinguishes Maltese enterprises, particularly micro, small and medium-sized enterprises, or foreign enterprises operating in Malta, for their efforts to improve their practices with the aim of increasing economic, social and environmental sustainability. The guidelines, specifically designed for this award, highlight the three pillars of sustainability and outline many indicators for each pillar that help to define what leads to sustainability in the area. When filling in the application form, the applicants must identify one measure that they are carrying out and state their; 1. Proof of commitment; that is, how sustainability is ingrained in the business operations,
and certificate; • First Prize €6,000 • Second Prize €4,000 • Third Prize €2,000
2.Organisational effort: Extent of the organisational effort dedicated towards the implementation of the measure, including any investment and operating costs, staff allocation/involvement and any training requirements, 3.Results achieved from the implemented measure: This can be demonstrated through for example, the reduction in costs incurred, energy consumption,
amount of waste or emissions generated or improvement of working conditions, 4.Direct and/or indirect impact of the measure on the sustainability pillars, 5.Long-term viability and the replication potential: the ability of the applicant organisation to take the initiative in sharing its experiences with other organisations, for example through involvement in business networks and dissemination at conferences amongst others. The top three (3) enterprises will be awarded a first, second and third monetary prize respectively together with a purposely produced trophy
To help enterprises in their applications process, info-sessions are held, and a dedicated helpdesk (22209823) and email address (enterprisepolicy.meib@gov.mt ) are set-up. The info-sessions will be held on Thursday 9th and 23rd May at 09:30am at; The Ministry of the Economy, Investment and Small Businesses, Millennia, 1st Floor, Aldo Moro Road, Marsa Further information can also be found on the website of the Ministry for the Economy, Investment and Small Business on www.economy.gov.mt and by downloading the 2019 Sustainable Enterprise Award Guidelines and the 2019 Sustainable Enterprise Award application form.
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The State of the economy Event features leading voices on the subject as it provides an analysis of the performance of the Maltese economy “Our economy as a whole is doing well. But not all sectors and industries are growing at the same pace, but we need to ascertain its sustainability,” said Mr Frank V. Farrugia, president of the Malta Chamber as he was welcoming guests to the The state of the Maltese economy, which was held last week. The event, which was organised by the Malta Chamber together with EMCS, provided an analysis of the performance of the Maltese economy and featured contributions by a list of international guest speakers together with Malta’s leading economic voices. The event also featured interviews with the Prime Minister Dr Joseph Muscat and the Leader of the Opposition Dr Adrian Delia. Farrugia said that the Chamber members were generally positive about their economic prospects. “The country, however, must ensure that it does not take success for granted. The international situation is ever volatile and we must remain nimble and efficient to respond to internal and external shocks.” While acknowledging certain challenges that exist for certain sectors, the president reiterated the Chamber’s call for long-term planning. “In fact, the Chamber called on government to capitalise on the present economic resilience to invest in the necessary infrastructure and safeguard longterm fiscal and economic sustainability.” Farrugia also mentioned that the Chamber would once again be contributing a new Economic Vision for the country. “As I was pleased to announce during our Annual General Meeting, the Chamber, under my Presidency, has started working on a second Economic Vision − this time for 2021 and beyond,” the Chamber president said. “As we speak, 25 champions of enterprise and industry are being involved in discussions in order to help the Chamber draw up this vision for
our country. I am truly honoured to have kicked off this ambitious and vital process,” Farrugia concluded. Interviewed by Stefano Mallia, Prime Minister Muscat said that the success Malta is experiencing boils down to one fact, “being fearless of reforms”. Dr Muscat admitted that it would be much easier for government not to change, but “the moment government stops changing and reforming, is the moment the country starts its downfall”. The prime minister spoke about the current reforms, from the energy sector and the change-over to electric cars, to promoting increased female participation in the labour market through incentives such as universal free childcare. He pointed out another major reform that was announced, aimed at achieving equal representation in Parliament. “If in the history of our Parliament there are only 27 women and hundreds of men, then something must be wrong. And this is ample reason to challenge ourselves to
bring about the necessary change.” Leader of the Opposition Adrian Delia, who was also interviewed by Mallia, asked who was
benefitting from the successes the country was achieving. He said that economic growth should not depend on growth in population size.
The Leader of the Opposition proposed a long-term plan that would determine which industries are best suited for sustainable growth.
Focusing on issues related to transportation, Dr Delia said that the country needed a metro system in place. He said that resurfacing roads at a great cost was not going to result in any benefit for the country, as a longterm plan was warranted. The event also featured a keynote speech by Prof. Peter Mckiernan, Professor of Management and director of the Global MBA at the University of Strathclyde in Scotland. Dr Gordon Cordina, Robert Geismann and Dr Philip Von Brockdorff gave presentations on the state of the economy of Malta. The event was concluded with a panel discussion led by Silvan Mifsud, with the participation of David Xuereb, Marisa Xuereb, Dr Nicholas Zahra and Dr Stephanie Fabri.
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Who are SMEs? ‘SMEs’ has become an overused acronym. This acronym does very little in explaining the complexity of the business segment it represents. 99.8% of the entire population of businesses in Malta are SMEs, so it is literally the whole population of business. In reality however 93% of these 99.8% are micro businesses. GRTU President Paul Abela writes
Whilst the term ‘SME’ refers to businesses with an employment count of less than 250 employees, ‘Micros’ employ less than 10 employees. In GRTU’s opinion the difference in number is too great to fit all in one term- ‘SME’. We are primary advocates against a one-size-fits-all, yet we tend to put all businesses in one basket. The time has come to move away from standard definitions and start addressing the different business sizes specifically. The biggest challenge facing businesses at the moment can be an example of this. The year has started at a slower pace than what we were used to during the last two years, but still there is more than enough to go around. The number of tourists visiting Malta has increased by 60% over the last 5 years. The number of foreigners working in Malta will reach 70,000 by end 2019, a good
percentage of which have come accompanied with their families. These two factors, together with all the projects that are currently ongoing and the sectors that are booming, means that there is more work than business can handle. If one had to see this from a purely entrepreneurial point of view, it is fantastic news. Business in Malta is doing exceptionally well and that is also what the economic figures tell us. Looking closer however there are a number of issues that need to be addressed. Some of these issues are horizontal, affecting all businesses and therefore the term SMEs can be used. Currently
businesses are doing more with less and their biggest concern is the lack of available human resources. It is an employees’ market and businesses are competing between themselves to win employees and keep their existing ones. Apart from the frustration of having to keep shops closed, not take on projects and disappoint clients, there is also a bigger impact. Catering for employment shortages has become a main function of every business as much as doing business in itself has always been. HR departments have had to be beefed up and businesses have invested heavily in retention and training programmes. All efforts to turn employment in an
enabling factor. If we had to look at the real heart and soul of our business community – at micro enterprises, this same issue reaches a completely higher level of alarm. These micro enterprise owners work like family units, they do not have an HR Department and with their resources they cannot compete with the much bigger SMEs in terms of wages and also other important factors like greater flexibility options. Bigger businesses have also done work distribution exercises and redeployment of resources to deal with the problem, with a team of less than there is much less room for creativity. Micro businesses are at the receiving end. At GRTU we meet many business owners that because of their vulnerability as a small unit, suffer greatly on a personal level. The owner and his/her family end up filling the multiple vacant roles that cannot be filled. Work related stress of micro business owners can today be found in increasing number of business units has soared. ‘Small’, and in this case ‘Micro’ is beautiful, but ‘Micro’ need more than admiration, they need appropriate support structures that see them for who they really are, not just SMEs.
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TAKEOFF mentoring
TAKEOFF at the Enterprise Campus more things to more people TAKEOFF, the University of Malta startup hub, allows new enterprise builders to make progress against milestones to make profit. The sole purpose of enterprise is to ensure profit is generated. Sustainability is therefore a necessary precursor to this goal. TAKEOFF has specialised in helping any new enterprise builder focus on sustainability and success. A thousand hours a year in mentoring are dedicated towards this objective which is carried out with the 23 presently-incubated initiatives but also with street walk-ins. TAKEOFF is the place for anyone with an idea for sustainable growth to drop in and discuss possibilities and no association with the university is required. The services are offered by validated mentors and based on the academic rigour stemming from the Centre of Entrepreneurship and Business Incubation which is the parent organization through which TAKEOFF functions. The enterprise idea can, but does not need to, be
based on blue sky science but certainly needs to have knowhow which is intrinsic to the management team. New enterprises are taken through iterative cycles of thinking to improve any aspect of the business proposal which is inadequate. Takeoff has assisted hundreds of commercial and social enterprises and is also tasked to manage seed fund grant schemes such as TOSFA (TAKEOFF Seed Fund Award) run by the Ministry for the Economy, Investment and Small Business, and MARSA (Maritime Seed Find Award) run by Malta Maritimma. Both grant schemes run on parallel tracks under different thematic streams. Applications to TOSFA 2019 will be open in early April 2019 where €100,000 is made available to the successful cohort of applicants (an average of € 15,000 for seed fund
TAKEOFF / Allowing your creativity to flourish
applicants). The successful applicants will have a year to deliver the business plan submitted on application and meet the milestones set out. The plan is also matched to predetermined expenses which are disbursed in tranches to ensure seamless business continuation. All applicants will become members of TAKEOFF and be followed over the years of incubation as they develop along the incubation continuum. Membership at TAKEOFF allows easy-in, easy-out terms with availability of shared office facilities, board rooms, seminar areas and 24/7 access to allow budding enterprise builders to truly immerse themselves. The University through TAKEOFF has for the last three years partnered also with the Malta Social Impact Awards (MSIA) to help applying voluntary organizations who present high social impact projects to be transformed into feasible and sustainable social enterprises. The sole objective is to ensure
that the social enterprise generates sufficient surplus in order that the social impact contribution is maintained. The current applications for MSIA 2019 are open and close 14th April 2019 ( http://siamalta.org/apply-now/). All shortlisted applicants receive mentored training at TAKEOFF over a four-month period in preparation for a second short listing in October and final pitch to the judging panel in November 2019. TAKEOFF does not require equity from the new enterprises but simply a commitment that on a monthly basis, an in-depth evaluation of the progress being made and how to enhance the speed with which progress is made. We do not purport the lore of fail fast which can lead to activity with no progress. The sole consideration is that the management team for the new enterprise seek out the path ahead and make visionary steps forward laced with a good dose of pragmatism. Not all ventures lead to success and the realisation that specific enterprises need to be halted is also a healthy decision. However, membership of TAKEOFF will help any new Founder achieve their full potential in business.
TAKEOFF’s common work area
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JAYE Malta… its role in preparing the citizens of tomorrow Entrepreneurship, Financial Literacy and Work Readiness are the three pillars of Junior Achievement Young Enterprise (JAYE) Malta Foundation which forms part of the JA Worldwide Network. Formerly known in Malta as Young Enterprise, JAYE Malta has been running its entrepreneurship development programmes successfully for 30 years.
Since its foundation in 1988, more than 7,000 students have taken part in the JAYE Malta programmes locally, bridging the gap between the realms of academia and the professional world. Over the years JAYE Malta has brought to the island a wider range of entrepreneurial programmes targeting age groups starting from eight up to thirty. Each programme brings along its unique value to the respective children and youth engaging them in activities to develop their learning with respect to financial capability, planning, budgeting, trading both locally and internationally, learning how to run a business, interpersonal communication and sales, shadowing and much more. The delivery of such programmes is only possible through a wide variety of collaborations with private and public entities as well as academic institutions who
recognise the value of our mission. We work hard to develop skills sets that help our students to make the transition from their school desk to the world of work. JAYE Malta depends on the ongoing support of its sponsors who believe in its mission tirelessly. The importance of developing entrepreneurial skills in our youths has never been greater. From introducing them to their Community through our programmes for the younger years where they learn about their own role in society and that of the world around them to the opportunities our students get at tertiary level to start up their own ideas, our Learning by Doing programmes ensure that they develop into financially capable and responsible citizens. Such skill sets are timeless and allow individuals to develop a hindsight that can only be honed through hands on experiences and opportunities. This was the protagonist concept discussed in the Entrepreneurial Education Seminar held on the 4th of December titled “Valuing Entrepreneurship Education in the 21st Century”. Ministers, companies, schools, local and interational organisations all recognised the value and responsibility we share in promoting entrepreneurship education for employability and wealth generation.
The collaboration between business and education can make a real difference. This year is no exception. Kicking off this scholastic year with more than 150 youths from more than 7 educational institutes taking interest in the classic Company Programme for Sixth Formers and the StartUp Programme for the Tertiary sector, a total of 11 touchpoints including workshops and presentations will have taken place. More than 25 business professionals across industry have been volunteering their time to mentor our students. The year culminates at the JAYE Finals & Awards Night hosted at the Hilton on the 4th of May, where the finalists from both post-secondary and tertiary programmes will be pitching and presenting their year’s efforts and ideas. The winners of the Company Of The Year Award
(6th Form) and StartUp of the Year Award (Tertiary) will respectively represent Malta at the JA Europe Company of the Year Competition (COYC) 2019 in Lille, France and JA Europe European Enterprise Competition 2019 in Oslo, Norway. Here our teams will pitch themselves against the best in Europe. Transversal skills such as entrepreneurship, innovation, creativity and leadership skills have proved to be essential not only to shape the mindsets of young people, but also to provide the skills, knowledge and attitudes that are central for tomorrow’s world. With businesses constantly looking for employees who are able to work in a team, think on their feet, communicate effectively whilst being adaptable in our constantly changing reality JAYE Malta’s role and relevance are clear.
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The true value of the implementation of AI and blockchain technology With Malta positioning itself as the Blockchain island and furthermore, working towards comprehensive AI legislations, this is a start towards the merging of two of the most hyped technologies currently available. Blockchain has been touted as one of the emerging technologies with the potential to disrupt every industry. By employing a form of decentralized database architecture, the record and authentication of all operations are applied upon the agreement of a number of parties rather than one single authority. The benefits of combining these two aspects of data science, is a rather efficient way of carrying out business decisions. Denise De Gaetano writes.
Artificial Intelligence is considered as the umbrella term for the various realms of technological advancement being recorded in fields which are concerned with machines being able to act independently and efficiently. AI helps in making decisions, assessing and understanding certain patterns and datasets, ultimately engendering autonomous interaction. The industries currently utilizing blockchain technology the most, are finance, health-care and trading, with the financial sector experiencing over the most wellknown aspect, that of cryptocurrencies such as Bitcoin, Ethereum, and Litecoins making the news . These same industries have been involved with the utilization of AI for an even more significant number of years. In the next five years, we will be seeing these two technologies integrated and heavily implemented in most industries. We they mix, the two compliment and add value to each other, by gaining deeper insights, higher efficiency and better accountability. Such a combination will enhance security, mostly due to the encryption protocol within a blockchain platform. Sensitive medical files or educational records can be stored securely in a blockchain. This same data is what is required by artificial intelligence algorithms in very large volumes. Such combination will also allow the better understanding of AI, in view of the fact that over a blockchain, there is a better likelihood that there is a record of the decision-making process at very stage of the algorithms implemented. A distributed ledger platform can store decisions carried out by an AI model, at every single point, making them available for analysis. With a blockchain, you can also be sure that the information is tamper-resistant from recording to examination. This would allow
entrepreneurs and the public to gain more trust towards AI. Moreover, the combination of both technologies, will optimize energy consumption of data mining, given that an AI algorithm would be initially training on historical data, prior to its full implementation. Artificial Intelligence is here to stay, with a natural partnership within blockchain technology, for its future expansion. A number of countries are working towards implementing smart cities through the combination of AI, IOT and distributed ledgers. The whole process starts off with IOT devices which collect the data, and manipulate it through AI algorithms. In turn, AI requires the blockchain to manage and protect the same data being collected in public spaces. These scenarios all lead us to believe that we will see more use of the combination of both technologies in the next couple of year.
BIOGRAPHY Denise De Gaetano is a Data Scientist, Business consultant, and Entrepreneur with more than 11 years of experience working within various industries. Her skills and expertise have helped with the transformation of data investments into actionable business results through the visioning and implementation of Big Data, Web Presence, Content Publishing, and Enterprise Search solutions. She was also involved in business strategies providing a superior engagement experience through a combination of business acumen, intellectual curiosity, a collaborative work style, and strong partnerships with awardwinning vendors. Denise is currently the founder of Data Science Malta, focussing on the provision of Data Science, AI, Machine Learning, Business and Blockchain Technology courses in Malta.