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Finance Ministry Parliamentary Secretary Tonio Fenech speaks at the Malta Business Angels Network seminar on ‘Meeting the Challenge of Change’. Here he outlines government’s priorities over the coming years - to reduce the deficit through tighter controls over expenditure and borrowing, to improve competitiveness by reducing or eliminating waste and impediments to the economy, and to eliminate exchange cost and risk through the conversion to the euro currency
It is great pleasure for me to be here to open the first European Business Angels Network Summer University in Malta. The proliferation of this network and the creation of our own national Business Angels Network is an important development to our economy and its integration and participation in the European network. It is also an expression of our country’s determination to leverage our potential within the wider economic, social and political context.
In some countries, start-ups and high growth SMEs are accounting for up to 80 per cent of new jobs created on the labour market. We recognise this potential to the extent that we have determined this to be the crux of our drive to create high value added employment in Malta. If we are to restructure to improve our competitiveness and seek an improved standard of living, then this is definitely part of the way forward. It then follows that our capital markets need to be conducive to investment in what is normally seen to be a higher risk investment in start-ups and small and medium sized enterprises. This is particularly true in Malta where practically every single enterprise is an SME.
As the Government we recognise that our Island market is small and that our economy is volatile because of our extraordinary dependence on the global and particularly the European economy. And yet, we also know that this very dependence on external markets means that it is only exports that make our economy grow in real and sustainable terms. This requires stability, facilitation and good governance to make Malta an attractive place, not just to live in, but also to invest in.
Over the years we have constructed or improved our banking system, our financial regulatory system, our stock exchange, and our internal market system. We have instigated upgrading of the professions. We have improved our educational system and linked it to the European and international educational systems through bilateral agreements at the University and country level as well as through participation of EU programmes for students and educators.
I believe that over the past years we have managed to create the necessary environment where international relationships and transactions can take place with relative ease and risk reduction, and where business can be incubated and grown.
In all this, the only constant is change. Our strategy is not at an end but rather, our past programmes have given us a future to aspire to, one for our generation and future generations to expect, work for and benefit from. And change we shall. Our focus over the coming years will be to reduce the deficit through tighter controls over Government expenditure and borrowing, to improve our competitiveness by reducing or eliminating waste and impediments to the economy, and to eliminate exchange cost and risk through the conversion to the euro currency. This, we believe, will continue paving the way to private indigenous and foreign initiative in Malta.
The Malta Business Angels Network will be a facilitator of capital flows to targeted investment, but clearly with a difference. To date, we have developed key agencies, particularly Malta Enterprise with its constituent Business Incubator, to assist start-ups, to assist exporters and to attract foreign direct investment inwards. We are participating in EU research and innovation programmes. We have also provided seed capital and made funds available for venture capital through our own resources. However, whilst formal capital resources and sources are available, this is far from adequate to propagate growth through indigenous start-ups and high growth SMEs, both in value terms as well as a seeding method.
And this is where I believe your Network has an important role to play.
On analysing Maltese businesses and industrial development over the past years, one immediately realises that when compared to other countries we have far fewer stories of the young and unknown Mr or Mrs Penniless who once had a brilliant invention and today has become a successful entrepreneur - because somebody was willing to finance and share that intrinsic start-up risk. Young innovationists have found it hard to raise the capital required to finance their venture and thus past success stories where more likely to be linked to those who were able to raise informal venture capital through family, friends and the like. And so today we still have an equity gap on our hands.
This is exactly where we welcome you, the Malta and European networks and particularly so because of the fresh way in which you facilitate and expand this informal venture capital market through your experience and expertise.
We have no doubt that, as in other countries, the Maltese investors, and the international investors interested in Malta’s fundamentals and potential, will have different views and appetites for the various investment risk profiles, as well as varying methods of risk mitigation and different investment entry levels and investment scale, such that the financial institutions operating in Malta cannot hope to service on their own. We hope that the Malta Business Angels Network will become an important player in filling this void and servicing this demand.
The Malta Business Angels Network is not just a source of finance. Its distinguishable mission is to be a facilitator towards “match making” by introducing a potential entrepreneur not merely to the capital investor but also more importantly to the experienced entrepreneur (who most likely has already benefited from the trust of a similar entrepreneur) to act as an investor and an advisor, in a sharing and supporting capacity.
We augur you success in becoming an integral part of the wider financial network in Malta through relationships with financial institutions, industry support organisations, the professions, the University, the Constituted Bodies, industrial organisations operating in Malta and other key players. Moreover, we invite you to make use of the various facilities and programmes in hand, not least, the partnering and funding programmes open to us in scientific research, technological development and innovation, and the industry partner search, and twinning facilities.
Dear guests, we augur that this conference and its workshops will be fruitful, that your stay will be pleasant and that we will have the opportunity to host you and to work with you into the future. |
