Commission Praises Malta SMEs for Extraordinary Performance

MEDIA ROOM

It would appear that the European Commission (EC) has singled out Malta’s SMEs for their performance in the past crisis-laden years, defining the performance as ‘remarkable’ and ‘extraordinarily robust’. Every year the EC analyses how much progress European countries made in implementing the Small Business Act. This memo describes the results of the 2012 assessments which were published in the country-specific SBA factsheets.

The SBA factsheets are developed on the basis of a wide range of success indicators and national policy developments, grouped according to the SBA’s 10 policy dimensions:

(1) Entrepreneurship
(2) Second chance
(3) Think small first
(4) Responsive administration
(5) State aid and public procurement
(6) Access to finance
(7) Single market
(8) Skills and innovations
(9) Environment, and
(10) Internationalisation

These also include trend charts in the SME sector for each country. It is important to note that these figures represent estimates for 2011-2014, based on 2008-2010 figures from the Structural Business Statistics Database (Eurostat). The below is a summary about what the factsheet has to say about Malta.

State of the SMEs:

In 2012, there were more than 26,000 SMEs in Malta’s private business sector, employing some 92,000 workers and producing about €2 billion in value added to the economy. They represent 99.8% of all businesses and account for 71.4% of the economic value-added and 80% of employment in the private non-financial sector. Recovery from the crisis: More than any other Member State, Malta´s economy depends on its SMEs and in particular the micro-firms of fewer than 10 employees. So far they have weathered the economic crisis very well. The performance of Maltese SMEs since 2008 has been extraordinarily robust. The number of SMEs increased by almost 1,000 and the employment level grew by 2,320 or 2.5 % over the period 2008-12. These increases are rather modest, but must be put in the context of the most serious economic crisis in decades. Against this backdrop — and the fact that SME sectors suffered heavy losses in the vast majority of Member States — this performance is quite remarkable.

Overall, weaknesses to date have not been a fundamental impediment for Malta´s SMEs: their recent performance has proven otherwise. However, some challenges need to be confronted yet more forcefully for the sake of Malta´s longer-term competitiveness. The limited export exposure of Malta’s SMEs – a general weakness of Malta´s SBA profile – helped many businesses by somewhat insulating them from the initial effects of the crisis. However, in the face of a limited domestic market and stagnating markets in Europe, the capacity of more firms to serve extra-EU markets needs to be further developed in the interest of their long-term competitiveness.