Ladies and Gentlemen,
We are here this morning to discuss the future.
Four organisations, four very important organisations came together with a clear determination to discuss the subject of the future of manufacturing in Malta…. In European Malta.
This morning, the University of Malta, the Malta Council for Science and Technology, the Malta Federation of Industry and Malta Enterprise are making two key statements which we cannot but acknowledge and reflect upon.
The first statement is that we cannot and should not leave the future up to destiny – or luck – or fortune. The future can be planned and directed. The future can be designed.
The second statement is that the future of manufacturing in Malta is such a crucial subject that we need to put our heads together, public sector, private sector – together – and see how we can support this important sector of our economic activity.
So allow me, at the beginning of my address to you, to congratulate the organisers of today’s initiative who have understood not only the paramount strategic and economic importance of the manufacturing industry in Malta, but who have also grasped this fundamental truth that change is inevitable and that the future is for us to design.
In this regard, Malta has always been an example of a country which embraces change, which anticipates events and moves in a fast-evolving, forward-looking external environment. The recent history of our country has seen drastic position changes being made by all the actors of the economy – the public sector, the education and training institutions, companies, trade unions. All in anticipation, or in reaction to the fast-changing environment that we operate in.
This, I will always repeat, is the beauty of the Maltese nation. Its adaptability and flexibility to new things. We have been like this ever since man decided to settle on this little island with no natural resources and with no direct link to mainland. Adaptation and flexibility have always been two critical success factors in our economic and political history. Adaptation and flexibility in our ability as a nation, to change and shift from one activity to another in order to remain in the market, and most of all in the ability of our workforce to retrain itself to new systems and requirements.
The history of Maltese manufacturing in the last fifty years is a fine case study of this systematic change. Some of us remember the early years of large-scale manufacturing in Malta. The Malta Federation of Industry, which this year celebrates its sixtieth anniversary, was born out of the need to organise the manufacturers when this sector was a novelty. At that time most of the activity was locally-oriented and primarily revolving around the food, beverages and furniture sectors.
The post-war and the independence era brought with them new realities and new, massive challenges. The political question of the time was ‘How can Malta survive without the support of British military activity?’ What economic activity can substitute the thousands of jobs that the British forces provided to the local community?
Thankfully for all of us, those who at that time were responsible for the well-being of the country had enough foresight to face the challenges and embark on new, innovative ways of managing the economy. Government, employers, trade unions together forged an ambitious strategy which had the objective of reducing the dependence on military operations and of attracting alternative activities.
It was in those circumstances that the Malta Development Corporation and the National Tourism Office of Malta were set up. As a result of this, Malta saw its first industrial estates and its first large-scale hotel expansion. Foreign investors were attracted, probably by low labour-cost and comfortable tax incentives, to set up manufacturing operations in Malta. The rest is history. The textiles and leathers, employing thousands, the plastics, the tobacco producers, the printers and so on and so forth.
Why do I say this today? I feel that I should look back at our history for one particular reason. The success of the manufacturing industry in the sixties and seventies was neither the result of luck nor was it the product of coincidence. It was the result of a clear vision based on foresight and on the belief in the capability and competence of our people.
And so was the rest of our industrial history. The decision taken by Government in the late eighties to open up our university and to invest heavily in the development of our human resources made it possible for Malta to attract new industrial operators who relied on the skills of the labour force rather than on the cheap cost and tax incentives. During the same time Government took a strategic decision to withdraw from actively participating in the market and took a new role as a regulator and facilitator. The ball was now clearly in the feet of foreign and local investors.
The result of that strategy was the attraction of new manufacturing operations in areas such as the pharmaceuticals and micro-electronics and supported by cutting-edge services industries such as the Information and Communication Technologies and Financial Services. At that time we had not yet coined the term ‘knowledge economy’, but we were already practising it in our planning.
We all agree that the era of industry based on low cost and cheap quality is over. We also agree that globalisation has meant that the external environment is changing in a rhythm which is becoming faster and faster. The life cycle of products and of processes is shrinking as we speak and the next order may go anywhere. This is the biggest challenge in front of us.
In full acknowledgement of this ever-changing environment that we operate in, Government has last month published an Industry Strategy for Malta. A strategy which is in itself a product of extensive consultation with the operators and which focuses on the modern requirements for a modern European country. A strategy which recognises the fundamental role of both the services and the manufacturing sectors. Also relevant to today’s conference theme is the fact that we have through MCST recently launched the Research & Innovation Strategy for the period 2007-2010 which explicitly identifies that ‘Value-Added Manufacturing and Services’ is indeed one area of strategic importance for Malta that should be supported.
So what will the shape of manufacturing be in the medium to long term? We believe that as the global economy shifts into new paradigms and into new territories, our survival and growth will be more and more dependent on the ability to retain a competitive advantage. And this we can only achieve for Malta’s manufacturing industry if we continue investing in relevant human resource capital, in our aggression to seek market penetration, on the enablement of research and innovation and in our ability to refine our infrastructures. Yes, it is quite a tall order.
But since when have we feared tall orders? Instead of fearing the future we are today accepting the challenges and putting together the building blocks which will take us to yet another chapter of our industrial history. And I want to emphasise that this is not something which government is doing on its own. Those days are long gone and forgotten. Today’s conference is in itself a witness of how this challenge is being tackled. Government, the private sector, the educational institutions, trade unions and the civil society are today actively participating in the design of our economy and of our policies.
It is therefore with pleasure that together we assisted yesterday to the launch of the strategic plan for the Malta College for Arts, Science and Technology. It is with pleasure that I note the collaboration between the Federation of Industry and University on European projects. The collaboration between the Federation of Industry and MCAST in the Employers’ Guide. The increasing collaboration between the University and a number of industrial firms.
It is also my pleasure to note that the four organisations present here today are the strategic partners of EUROMEDITI – an ambitious project which will serve to attract high-end research activities for manufacturing and services industries.
The future of manufacturing in European Malta is going to be shaped in the results of these bold initiatives that we are taking today. It is going to be driven by the belief that manufacturing is neither dead nor dying. And it will co-exist, rather than taken over, with the services industries. Indeed, each job in manufacturing supports at least one in services; some estimates as many as three jobs.
It is important that we understand that the changes that are taking place in our economy are not the end of the line for manufacturing industry but opportunities for businesses that understand the need for continuous innovation, forward planning and investment in relevant skills and resources.
May I take this opportunity to thank you for all the effort that all of you are making in support of the Maltese manufacturing industry and wish you a fruitful conference.
