A thriving Maltese biotechnology
sector by 2015
Finance and Economic Affairs Minister John Dalli addresses
Mondays Realising a Thriving Maltese Biotechnology Industry
by 2015, which forms part of the eFORSEE Malta Biotechnology Pilot
Project. In his speech Minister Dalli outlines government initiatives
to spur research and development and the good deal of effort is being
channelled to create an environment that is friendlier to high technology
ventures both of which are essential in staffing the promising
The prosperity of a nation is dependent on its ability
to create value, that is, its value added. Thus increased prosperity
can only be sustained by the production of higher value added products.
Innovative products have a high value added as they can command higher
prices due to their scarcity. Therefore, increased prosperity needs
to be continuously fuelled through innovation.
NSO is currently working in order to compile a full set of economic
indicators, as complete innovation benchmarking is not yet possible.
However, statistics on the local business community published lately
by NSO indicate that Maltas innovative base is very weak. Employees
with higher education constitute only four per cent of total employees
in Malta. On the other hand these constitute 13.5 per cent in the EU-15
with the highest percentage reaching 20.9 per cent in Sweden and the
minimum being 6.6 per cent in Austria.
The number of employees with higher education gives an indication of
the innovative capacity of companies though not a full picture. The
NSO survey also reveals that only 19.2 per cent of the interviewed enterprises
introduce new or significantly improve products and only 14 per cent
introduce new or significantly improved production processes. The sectors
that contribute mostly to innovation are the manufacture of radio, television
and communication equipment and telecommunications. When asking about
the factor hampering innovation activity, the majority of companies
felt that innovation is not important for their product.
The Government has laid down a number of incentives to spur research
and development. During the last budget speech it was announced that
150 per cent of the expenditure on research and development could be
decreased from taxable income. The Business Promotion Act also gives
special tax incentives to companies that set up to undertake Research
and Development. Companies in the Biotechnology sector qualify for these
special tax incentives. Research and development also qualifies for
investment tax credits.
The Government is also helping start-ups in innovative sectors as Biotechnology
through the provision of the Kordin Business Incubation Centre (KBIC)
and the Technology Venture Fund, which are both aimed at highly innovative
and technological projects. The KBIC provides physical space and technology
infrastructure in a convenient, yet low cost location, along with high
speed internet access to its clients, making KBIC an ideal place to
nurture, grow, and launch technology oriented businesses. It also provides
access to finance, the expertise and the objectivity necessary to refine
the ventures vision, assist in the development of its business
model, and build its teams. The KBIC also offers the necessary training
and mentoring to enable each enterprise to manage its business effectively
as well as networking opportunities. The Technology Venture Fund provides
venture capital for high technology projects. These initiatives are
already being availed of by a small number of companies in the Biotechnology
Incentives need to be complimented with a sound administrative structure.
We have just passed the Malta Enterprise Act through Parliament. Through
this act these three entities will be merged together in order to create
an efficient one-stop shop for the business community. Malta Enterprise
has been entrusted with the focus on and continuous reassessment of
niches that Malta is best suited to serve. Malta Enterprise will also
market Malta as an ideal location for investments in these niche areas.
Malta Enterprise will influence all services that have a bearing on
industry competitiveness as the educational institutions. The Omnibus
Act, which has also just been passed through Parliament, brought our
Patent legislation in line with that in the EU.
Thus a lot of effort is being channelled to create an environment that
is friendlier to high technology ventures. Of course, a lot still needs
to be done and all these initiatives need to be further refined and
marketed in order to spur increased innovation capability in Malta.
Increased Research and Development and innovation are a EU wide challenge.
One must welcome foresight initiatives as the one which is being launched
today as only through such exercises can be prepared for the challenges
ahead in order to transform them into opportunities.