Issue link: https://maltatoday.uberflip.com/i/1501361
FINANCE Minister Clyde Caruana has made it amply clear that unless Malta adopts a new economic model, its population would have to reach 800,000 in a few years to maintain the same level of growth as today. If the architect of the economic growth model Malta has embraced since 2013 is now calling for its overhaul, then surely something must be wrong with it going forward. To make matters more complicated, Econ- omy Minister Silvio Schembri politely dis- missed Caruana's analysis and insisted the economy only needed 'tweaking'. Prime Min- ister Robert Abela on Sunday tried to calm the waters, and injected a dose of realism by advo- cating for 'change without shock'. Writing in The Sunday Times of Malta, Ab- ela spoke of how the country must now shift its focus "to the next phase" of economic de- velopment. He then said the country must continue to "transition into a more knowl- edge-based economy" that creates higher value-added sectors, which will "enhance our sustainability". Abela did not go into specifics, but reiter- ated the five pillars government had outlined when launching its economic vision in 2020: quality of life, education, better infrastruc- ture, climate neutrality and governance. A glimpse of what the future could hold was provided last week by Malta Enterprise, al- though the government did not hype it up. The government agency proposed a public aid package for STMicroelectronics to the Eu- ropean Commission as part of an EU-wide in- itiative to boost microchip production in the bloc. The Malta proposal, in conjunction with Italy and France, was approved along with several others put forward by other member states. No details have yet emerged as to the size of the aid package ME will provide; what level of investment STMicroelectronics is expected to put up; and how many new jobs will be cre- ated as a result of the company upgrading its production lines. Obviously, this means that the State will be forking out millions of euros; but this is a strategic investment in the knowledge-based industry, of the kind referred to by the Prime Minister. And this type of State subsidy is likely to be more economically fruitful in terms of job creation and sustainability, than the hundreds of millions in subsidies being spent now on fuels. Malta needs more companies like STMicro- electronics that are at the cutting edge of in- novation and development. Not all have to be big as STM; indeed, Malta's space limitations make attracting large companies a problem. But there is scope to attract medium-sized enterprises and start-ups that service the larg- er companies. The Prime Minister wrote: "In our road to- ward the next phase of economic evolution, investing in our workforce's upskilling and reskilling is non-negotiable. This will equip our future economy with the talent required to drive prosperity. By embracing innovation, prioritising education and leveraging our re- silience, we can confidently progress towards the next phase of Malta's economic prosper- ity." The key word in this statement is education. Malta must ask itself whether its education system is preparing the next generation of knowledge workers. During the state of the nation conference or- ganised by President George Vella a fortnight ago, AI entrepreneur Gege Gatt said that es- timates show that up to 45% of existing jobs could be replaced by Artificial Intelligence over the coming years. The world is at the cusp of an economic rev- olution that will see AI make many jobs obso- lete but will also create a need for new work- ers in the fields of engineering, information technology, software programming, game development and the industries that service these sectors. Malta must take stock of where it is and where it wants to go and chart out the changes that have to be made across every sector. This is much more than just tweaking but is a ne- cessity if Malta wants to prosper without the need to go for unbridled population growth. So, change without shock by all means, but government also needs to have a sense of ur- gency. The world will not wait for Malta to catch up. The world will not wait for Malta to catch up 11 LETTERS & EDITORIAL maltatoday MaltaToday, MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 9016 MANAGING EDITOR: SAVIOUR BALZAN EXECUTIVE EDITOR: KURT SANSONE EDITOR: PAUL COCKS Tel: (356) 21 382741-3, 21 382745-6 Website: www.maltatoday.com.mt E-mail: dailynews@mediatoday.com.mt maltatoday | WEDNESDAY • 14 JUNE 2023