Issue link: https://maltatoday.uberflip.com/i/1305625
3 maltatoday | SUNDAY • 1 NOVEMBER 2020 BUDGET2021 THE Budget 2021 announced last Mon- day clearly sets two main objectives: to address the economic and social effects of COVID-19 and to provide direction for a more resilient, more productive and more sustainable economy that can support government's social programme and its ambitious economic targets with digitalisation and the Green Deal as the main pillars of a more resilient and more productive economic model. Digitalisation, and the strategy being developed, will be key to achieving gov- ernment's economic targets. The struc- ture of the Maltese economy is chang- ing fast, and there is an increasing shift in emphasis away from physical capi- tal to human capital. The aftermath of COVID-19 will accelerate this process, with the demand for labour for skilled and qualified personnel in the digital economy and other technical services likely to increase as the transition to- wards a more resilient and sustainable economy gathers pace. This change will bring about changes in the content of jobs themselves with more emphasis on digital skills and competencies. Already, digital tech- nology is transforming everything from hospitality and banking, to healthcare and e-commerce, but more needs to be done for all economic sectors to fully embrace digitalisation and its many ad- vantages. Hence the relevance of the digital- isation strategy, as mentioned in the Budget 2021. One of the aims of this strategy is to boost job creation and ca- reer prospects for Malta's workforce. Job creation in fast-growing, knowl- edge-intensive sectors is the future of our labour market, and individual pro- ductivity growth is more likely to occur if our businesses exploit the benefits of digitalisation. For businesses, boosting productivity is crucial, and is a key to their compet- itiveness. Digitalisation provides the platform for boosting productivity, and productivity growth means that costs rise more slowly, price competitive- ness and payroll capacity improve, and jobs become more secure (and hence more desirable). As more added value is achieved, profitability improves, busi- ness growth become possible, and the ground is laid for investment and the further development of business activ- ities. In a fast-changing environment, the role of government in developing sup- portive policies for a digital economy is critical. We are fully aware of our responsibility to promote an environ- ment within which the private sector can flourish. At the same time we are providing the stability and predictability in terms of policy in such an important area of our economy. We do this also fully aware of the so- cio-economic benefits of enhanced in- vestment in the digital economy. Though government's role is and will remain crucial, it is the private sector that will drive this digital transforma- tion. Private sector investment in digi- tal infrastructure is not new. However, the scale of the investment required to support a more resilient and productive economic model is huge as are the myr- iad opportunities arising from digitali- sation. We cannot discount investment from overseas either. Foreign direct invest- ment already accounts for a sizeable proportion of investment in our econ- omy but digitalisation will offer further opportunity for foreign investment. The digital economy offers huge ad- vantages in terms of business efficiency, economic resilience and ubiquity of ac- cess for all citizens. This will not happen overnight and the transition will take its course. However, in the Budget 2021, this gov- ernment has clearly its long-term com- mitment to lay the groundwork and to support the transition towards a digital economy. This is fundamental to our political vision for a more vibrant economy that aims for a more prosperous future for its people. Setting direction towards a digital economy OPINION Clayton Bartolo Clayton Bartolo is Parliamentary Secretary for Digital Services Digitalisation provides the platform for boosting productivity, and productivity growth means that costs rise more slowly, price competitiveness and payroll capacity improve, and jobs become more secure