Issue link: https://maltatoday.uberflip.com/i/1542534
Island in the world: What a data release tells us about risk, resilience and readiness 15 maltatoday | SUNDAY • 11 JANUARY 2026 OPINION problem-solving and future ca- pability. The fact that access to specialised knowledge has overtaken cost reduction as the main driver suggests a structural gap in Malta's skills ecosystem. It implies that firms operating here increasingly rely on exter- nal nodes to remain competitive, rather than finding or developing those capabilities locally. The release also highlights where Malta feels global stress most acutely. Rising raw material costs, transport delays and sup- ply-chain disruptions were iden- tified as the main constraints, ahead of energy costs that dom- inated concerns elsewhere in Europe. This reflects Malta's geographic reality. As an island economy, it is acutely sensitive to logistics, shipping capacity and price volatility. What might be a moderate inconvenience for a continental economy can quick- ly become a binding constraint here. This matters because the world is no longer returning to pre-pandemic norms. Supply chains are shorter, more region- alised and more politicised. Geo- political shocks, trade sanctions, climate-related disruptions and regulatory fragmentation are be- coming structural features of the global system. In such an envi- ronment, resilience is no longer about efficiency alone. It is about redundancy, adaptability and do- mestic capability. The NSO data also shows that while some jobs are lost through international sourcing, others are created. This reinforces a key point. Globalisation is not a ze- ro-sum game. But the quality of jobs created matters. If high-val- ue functions are consistently externalised while lower-val- ue activities remain local, wage growth, productivity and inno- vation will lag. Over time, this erodes the economic base, even if headline employment remains strong. From vulnerability to readiness The most important insight from the data is not that Malta is losing jobs to globalisation. It is that Malta's growth model is increasingly reliant on external capability to sustain itself. That is a vulnerability in a world defined by permacrisis. Resilience is often misunder- stood as a defensive concept. Stockpiling, buffers, contingen- cies. These are necessary, but in- sufficient. Economic resilience is fundamentally about readiness. The ability to adapt, reconfig- ure and move up the value chain when shocks occur. For Malta, this means investing not just in infrastructure, but in skills, insti- tutions and domestic depth. The findings point directly to education and training as stra- tegic priorities. If firms are relo- cating IT, engineering and tech- nical services because specialised knowledge is unavailable locally, the response cannot be to accept this as inevitable. It must be to ask why Malta is not producing or attracting enough of this capa- bility. Technical and vocational education, continuous upskilling and stronger links between ed- ucation providers and industry are no longer social policy is- sues. They are national resilience strategies. The data also raises questions about how Malta allocates cap- ital. An economy that channels a disproportionate share of sav- ings into property and low-risk assets limits its capacity to build productive depth. When innova- tion, skills development and en- terprise struggle to access patient capital, firms will continue to look outward for solutions. This reinforces dependency rather than autonomy. Equally important is the insti- tutional dimension. The report identifies tax compliance and administrative complexity as barriers considered before firms relocate functions abroad. While not decisive, these frictions mat- ter. In a world where firms can choose where to locate functions with increasing ease, small in- efficiencies compound quickly. Streamlined regulation, predict- able frameworks and responsive institutions are not about being business-friendly in a narrow sense. They are about reducing fragility in an interconnected system. It is also worth acknowledging the growing role played by the National Statistics Office itself. The depth, breadth and quality of recent releases reflect clear improvements in data collection, analytical ambition and thematic coverage. For economists, ana- lysts and policymakers alike, the NSO has become an increasingly indispensable source of insight into how Malta's economy is evolving beneath the surface. In a small economy navigating com- plex global forces, high-quality statistics are not a technical lux- ury. They are a strategic asset. A stronger, more visible NSO is essential for elevating public debate, grounding policy in ev- idence, and supporting a more mature approach to economic decision-making. This powerful NSO release is another reminder that Malta's economic story cannot be read in isolation. The island is deep- ly enmeshed in global flows of goods, services, data and knowl- edge. This has delivered pros- perity, but it also means that external shocks transmit quickly and forcefully. The appropriate response is not retreat, but stra- tegic upgrading. Building resilience for Malta means deliberately strengthen- ing domestic capability where it matters most. Skills that anchor high-value activities locally. In- frastructure that reduces logis- tical vulnerability. Institutions that can anticipate change rather than merely respond to it. And an economic debate that is ma- ture enough to move beyond short-term performance and confront long-term exposure. Quiet data releases rarely make headlines. But they of- ten carry the most important messages. This one tells us that Malta is connected, competitive and adaptive, but also exposed. Whether that exposure becomes a weakness or a catalyst for re- newal will depend on the choices made now. Malta's growth model is increasingly reliant on external capability to sustain itself. That is a vulnerability in a world defined by permacrisis NSO data shows that the most commonly outsourced functions are information technology, engineering and technical services