Six in ten firms in Malta (60%) have already invested or plan to invest in the next three years in measures
to tackle the impact of weather events and reduction in carbon emissions. This is below the EU average (67%).
Micro and small firms are less likely to have invested or plan to invest than medium and large firms (51% versus 67%).
The cost of investment activities (66%) is the biggest barrier to investing in this area.
Figures related to investment aptitude among Maltese firms were revealed by the European Investment Bank during a webinar organised with the Central Bank of Malta.
Uncertainty about new technologies to help tackle the impact (68% versus 44%) are cited more often
as a barrier by medium and large firms than by micro and small firms.
Generally across all firms, the most frequently cited long term impact of COVID-19 in Malta is expected to be the increased use of digital technologies (46%), particularly within the construction/infrastructure sectors (58%).
20% of firms expect a permanent reduction in employment levels
Firms in the services sector expect a greater impact on their supply chain than firms in the construction/infrastructure sectors (50% versus 26%) and also on their service or product portfolio (42% versus 26%). Around one in five firms (22%) expect a permanent reduction in employment levels. Manufacturing firms are less likely to expect a permanent reduction compared to services firms (11% versus 27%)..
More than four in ten firms (43%) developed or introduced new products, processes or services as part of their investment activities, higher than in EIBIS 2019 (33%) and in line with the EU average (42%).
Specifically, 12% of all firms claim to have undertaken innovation that is new to the country or world, in line with the EU average (15%). All sectors and sizes of firms have a similar share of innovation activity.
Around six in ten firms (58%) have implemented, either fully or partially, at least one digital technology they were asked about. This is below the EU average (63%).
Medium and large firms have the highest share of firms implementing digital technologies (69%) and are also the most likely to have organised their entire business around at least one of the digital technologies (35%).
Infrastructure and services firms report relatively high take-up of cognitive technologies when
compared with their EU peers.
The Governor of the Central Bank Edward Scicluna chaired a panel discussion with key stakeholders involved in investment finance and business transformation. These included Mahmood Pradhan, Deputy Director, European Department, IMF, Josef Bonnici, Chairman of the Malta Development Bank, Rick Hunkin, Chair of the Malta Bankers’ Association, Marisa Xuereb, President of the Malta Chamber of Commerce, Enterprise and Industry, Paul Abela, President of the Malta Chamber of SMEs, and Andrea Clerici from the Rome Office of the EIB.
The panel discussion tackled some of the most salient aspects with regards to economic recovery, starting with the understanding that we should be looking at a ‘new normal’, rather than assuming that things will simply go back to the way that they were prior to the pandemic. The panelists stressed the importance of investment – particularly when it comes to digitalisation and climate change – and the strengths of Malta’s regulatory environment. There is no doubt that the pandemic is one of the biggest challenges our economy has faced. However, it was also clear from the discussion that one of the most important things was not just access to finance but to reassure firms that they could have the confidence which is a prerequisite for investment.
Commenting on the meeting, Prof. Scicluna stated: “We were fortunate to have had an excellent group of speakers from leading institutions in Malta, Luxembourg and Washington. Their perspectives of the post-pandemic period gave the meeting a number of insights on how to narrow the existing digital and green gaps.”