The need to promote Malta as a business hub

A significant investment in a locally-based company by four top global players hardly received a mention in the local press, except maybe for a small item buried on one of the inside pages. Although a press conference was called to announce the deal, there was very little response from the media, even though the investment totalled US$35m. Over the past months, the government and social partners have been harping on the need to attract foreign investment to the island, and yet, when it does arrive, nobody seems to be bothered. How many many top international players like Bank of America and Deutsche Bank have invested in local companies? How many million of dollars have been pumped into local small and medium-sized businesses?

The question we ask is why make a fuss because no investment is finding its way to Malta but keep mum when it actually does? Something is going wrong. We are living in a business scenario that is constantly changing. Technological developments are forcing traditional companies to revamp their way of thinking and in some cases even their line of business.

The deal struck between the four investors and iWorld, an internet incubator company, is significant not only because of the amount invested but because the company has focused its attention on a market that is still in its infancy but about to boom in a year or two. In an interview with The Malta Business Weekly last week, the CEO of iWorld, Andreas Gerdes, could not have made it clearer: the future is not in traditional products but technology, more specifically: e-commerce and m-commerce.

The figures speak for themselves. Research shows that m-commerce will boom by 2002. Advertising on mobile devices will total 23 per cent by 2003. With mobile devices providing unrivalled one-to-one marketing capabilities, the marketing industry will exploit financial services using mobile applications. Businessmen like Mr Gerdes have realised where the market is going and that is why international investors have shown so much interest. And maybe this is one of the island's main problems. People fear change. They are unwilling to take risks. Instead of seeing how they can take advantage of globalisation, they turn to the government for even more protection.

The Institute for the Promotion of Small Enterprise (IPSE) has a very important role to play in helping local companies to shift from a protectionist environment to one embracing the challenges of globalisation and eventual European membership. IPSE cannot do this on its own. Businesses must be willing to accept that changes are needed and be ready to risk. After all a company's success depends on the diversification of its products and services, and not only face but anticipate competition.

It is therefore pity that when a local company manages to break into the global market and attract interest from investors in the US, Germany and Japan, the business community's reaction is so dismal. Small businesses do not need to attend conferences on privatisation and liberalisation. They want concrete examples of how to do business. They want to hear, first hand, how iWorld and others became successful companies. On the other hand, admittedly, it is not an easy process. Encouraging international players to invest locally requires patience, money and guarantees that they will get a return on their investment. Promoting Malta abroad is of utmost importance and probably the key factor in attracting investment. Although tourism is the country's main source of revenue, too much attention has been focused on this industry when Malta is represented abroad.

Foreigners are not aware of the great potential that Malta has to offer to businesses setting up shop here. Mr Gerdes said that his company spent more money in telling the Americans where the island was and what it had to offer than in convincing them. This means that although Mr Citizen knows about Malta as an excellent holiday getaway, the business executive and investor will never show any interest because they cannot visualise the island as a focal point of business operations. Admittedly, the resources to promote Malta as a business centre are not readily available so this means that existing funds channelled to say the UK - where Malta is already well known - should however be spent on promoting Malta to investors and business executives in markets like Germany, Sweden and Austria. It would be unfair to say that nothing is being done but it is clear that there has to be a change in mentality. The country has to move away from the two-class society - locals and foreigners - and think globally - one world, one business. Unless the country is geared towards attracting and accepting international investment, Maltese business will find it extremely hard to survive in the global economy.

As the saying goes, no man is an island. And Malta cannot afford to remain an island in the global market.