Innovation Europe > News > Innovation EU Vol2-1 > Innovation Malta

In terms of innovation performance, Malta remains in the group of catching-up countries with an innovation performance (SII = 0.329) that is well below the EU average (SII = 0.475). In 2008, it exhibited a fast rate of improvement that was well above that of the EU-27. Malta is experiencing fast growth rates in certain indicators such as throughputs, with an increase in community designs. It leads in high-tech exports and sales of new-to-market products. Broadband penetration among firms has increased steadily and is expected to reach 100% in 2009.

However, the innovation performance of SMEs remains a weakness in terms of the low percentage introducing product or process innovations (14.4%) which is well below the EU-27 average (32.9%). SMEs do, however, perform better with regard to the introduction of organisational and marketing innovations. In fact, non-research and development (R&D) innovation expenditures lie above the EU average.

In 2007, total investments in R&D (GERD, gross domestic expenditure on research and development) reached 0.6% of GDP, of which the business sector accounted for 0.39% GDP and the public sector 0.21% GDP. Public expenditure on R&D stabilised in 2004 to 2006, however it experienced a 2.2% decrease in 2008 compared to 2007, whilst BERD decreased over 2005 to 2007 and is projected to decrease further in 2009 according to Eurostat extrapolations. This leaves Malta struggling to achieve its Lisbon target of investing 0.75% of GDP in research and innovation and a GERD/GDP that is well below the EU-27 average of 1.83%.

Main innovation challenges

• Increasing financial resources in R&I in niche areas of economic importance.
• Boosting human resources in science and technology in emerging sectors of the economy.
• Creating an enabling environment that nurtures innovation and entrepreneurship amongst business enterprise, including SMEs he NRP 2008-2010 touches.
• Developing sector-specific innovation policies, strategies and measures in areas of national
• Creating demand for innovation through public procurement.

Conclusion

Future policy action needs to focus on developing and implementing a stand-alone national innovation policy that meets the specific contextual requirements of local industry and provides a framework co-ordinating the activity of those entities with competencies in innovation policy design and implementation.

The recent (2008) initiatives to develop specific action plans in strategic sectors provide an opportunity to formulate targeted policies to stimulate innovation in these areas (Section 1.3). The investments in “hard” R&I infrastructures currently underway (laboratories and equipment as well as capital investments in a biotech park) will contribute to building capacity in these target areas, as well as the incentive scheme to build collaborative clusters.

Since most of these measures are tied to structural funding programmes, there is a risk of delay in their implementation due to monitoring and administrative procedures. It is equally urgent to supply a skilled workforce that meets the demands of these areas of growth especially in the face of the apparent shortage of skills across all levels from technicians to professionals in certain areas. Highereducation reform is addressing the problem of skills mismatches and the challenge of balancing the need for new specialisations with the provision of generic skills.

The improved methodology for data collection on R&I has enabled more accurate monitoring of Malta’s innovation performance. A persistent weakness of the system is the lack of an evaluation culture of innovation programmes and measures. In fact, most of the research and innovation programmes and measures have not been evaluated so there is limited intelligence on their uptake and impact and this affords for limited policy learning.