Speaking at a webinar organised by FinanceMalta on the role the financial services industry has in moving Malta’s economy during COVID-19, Malta Enteprise CEO Kurt Farrugia has identified four areas for improvement which he believes will help Malta’s economic prospects.

In his view, Malta should focus on four main areas for an improved economic model:

A focus on education – higher education and training, better efforts to deter early school leavers and equipping HR with skills for technology driven jobs.

Promoting the uptake of Science, Technology, Engineering and Maths (STEM) subjects by students.

An improvement in Malta’s overall business sophistication, from the level of sophistication by banks to encouraging a cash-less society.

An increase in tech-savvy households as it is believed such households will consume financial services to a higher degree.

Mr Farrugia spoke of the importance of having a diversified economy, as can be seen from the economic shock caused by COVID-19.

He highlighted, when showing the impact on different sectors of the pandemic, how gross value added generated by wholesale, retail trade, accommodation and food services had amounted to -4.5% when comparing Q1 2019 with Q1 2020.

Manufacturing on the other hand registered an increase of GVA of 3.8 per cent, while financial and insurance activities registered an increase of 5.2 per cent.

Mr Farrugia said this shows the importance of diversification, highlighted by a situation where some pharmaceutical, medical device and manufacturing companies actually hired new staff during the COVID-19 disruptions, showing the importance of transferrable skills.

Malta Enterprise’s role is to spur investment in Malta, both foreign and local, as well as encourage diversification of the economy.

He said that since technology has merged ever closer with financial services, Malta Enterprise has viewed this as an opportunity to capitalise on, drawing on examples of contact-less payment services and the proliferation of online shopping.

Mr Farrugia said that while the relationship with banks has greatly improved, and now there is a better understanding of what kind of clients Maltese banks will take on, he said there is a need for local banks to up their game. He pointed towards a reluctance to emerging industries because of a lack of understanding, as well as a conservative approach to providing loans to services-based companies.