Government needs to be on the ball to develop ‘knowledge economy’ – Claudio Grech

In his maiden address in the House of Representatives, Nationalist MP Claudio Grech underlined the importance of the knowledge economy to Malta's overall global competitiveness, pointing to the preceding PN administration's approach as what allowed Malta to place itself on the global digital landscape.

"There is no doubt that two important pillars in the Maltese economy are the sustained generation of economic growth through knowledge, as well as constantly remaining competitive," Grech said, noting positively that these two elements were well-emphasised in Finance Minister Edward Scicluna's speech earlier during the 2013 budget debate.

He said that the importance of both elements needs to be well understood in the context of the ever-increasing competitiveness of the global digital and technological market.

"Today competitiveness in this sector has increased considerably. Several newcomer economies are making big advances and are offering competitive conditions which we have to compete against," Grech said.

He also argued that the benefits of performing well in knowledge-based sectors are well-proven.

"With more competitiveness through innovation and research, countries are able to attract more foreign investment and encourage existing foreign investment to expand further. This leads to more and better employment in diversified sectors which can attract clusters of innovative companies."

He added that work in itself generates more and better wages and profits, "and since these sectors have a high value added, they translate into greater government revenue, which allows the government to invest more deeply to generate yet more economic growth and renew the cycle."

"That is the cycle that this side of the house always believed in," he said, adding that this approach allowed Malta to place itself on the global digital landscape.

"We need to aspire to be among the best 10 digital economies to keep attracting talent, thus allowing us to increase in the value added scale to avoid modern cheap labour that the sector is vulnerable to."

He however warned government that it needs to be on the ball by monitoring ongoing development in the digital sector, and ensuring that Malta always remains one step ahead.

"Where we go in this sector depends entirely on the ability and the focus of the government. The coming years will be vital for Malta to be able to plan the steps towards the success that will determine the competitiveness of our economy. We need to have a clear vision."

Grech called on government to work towards creating new digital economic niches that are able of creating work, such as cloud computing, health applications of technologies, and robotics.