AI for Malta’s economic future

Artificial intelligence is rapidly emerging as one of the most transformative technologies of our time. Across the globe, AI is reshaping industries, creating new opportunities and raising important questions about the future of work. For Malta, the strategic adoption of AI could unlock significant gains in productivity, competitiveness and innovation.

The challenge before us is not whether AI will affect our economy, it already is, but how we can position Malta to embrace it responsibly and effectively.

Recent metrics help to underline that AI is not some distant prospect but is already delivering measurable change. Globally, AI-exposed industries are seeing productivity growth nearly four times higher than less exposed ones: from around 7% over 2018-2022 to about 27% over 2018-2024 in revenue per employee. Moreover, workers with AI-related skills are commanding a wage premium averaging 56% while roles in sectors highly exposed to automation have nevertheless seen job availability rise by 38%.

In Malta, there are signs that adoption is growing. As of 2024, about 17.3% of Maltese enterprises are taking up AI, which is above the EU average. A 2024 PwC Malta AI Business Survey revealed that 56% of organisations do not yet have a dedicated individual or team for assessing AI use cases and 75% lack an AI governance framework, showing that while deployment is increasing, strategic and ethical structures are behind.

Malta’s economy is strongly service-oriented, with tourism, financial services and gaming forming its backbone. Each of these sectors stands to benefit from targeted AI adoption.

In tourism, predictive analytics can help operators anticipate demand and optimise resources, while AI-driven personalisation can enhance visitor experiences.In financial services, the use of AI can improve fraud detection, streamline compliance processes and deliver faster, more efficient services to clients. Within iGaming, AI tools can strengthen security, detect irregularities and tailor offerings to customer preferences, ensuring the industry remains innovative, reputable and competitive.

Furthermore, adopting AI within Malta’s manufacturing, pharmaceutical and aviation sectors could deliver significant productivity gains by optimising operations, reducing costs and unlocking new efficiencies.

In manufacturing, AI-powered predictive maintenance can minimise downtime by identifying equipment failures before they occur, while advanced robotics can streamline production lines.

In pharmaceuticals, AI can accelerate drug discovery, improve quality control and enhance supply chain management, ensuring both compliance and competitiveness in a global market. Aviation, meanwhile, can benefit from AI-driven scheduling, predictive safety systems and smarter fuel optimisation, helping operators manage resources more efficiently.

Together, these applications would not only increase productivity across these high-value industries but also position Malta as a hub for technologically advanced, knowledge-intensive sectors, strengthening its economic resilience and global competitiveness.

By automating repetitive tasks and unlocking new insights from data, AI enables businesses to operate more efficiently and free up human effort for higher-value activities. This will also help to address pressures linked to overpopulation by easing demand on limited resources, reducing administrative bottlenecks and ensuring that essential services such as healthcare and transport are managed more effectively.

The potential benefits of AI are inseparable from the realities of workforce transformation. While some roles will inevitably be automated, new types of employment are also likely to emerge. The priority, therefore, must be to equip workers with the skills necessary to thrive in an AI-driven economy.

The priority must be to equip workers with the skills necessary to thrive in an AI-driven economy- Jerome Caruana Cilia

This calls for continuous training opportunities in digital and AI-related fields, accessible to workers across all sectors. Education reform is also crucial, with AI, coding and data literacy integrated into school and university curricula to ensure that young people are well prepared for future opportunities.

Alongside this, Malta must nurture a culture of lifelong learning in which individuals and businesses view ongoing training as essential. By embedding adaptability into the workforce, Malta can ensure that technological change strengthens livelihoods rather than disrupts them.

SMEs are central to Malta’s economy, yet many lack the capacity to explore AI on their own. To avoid a situation where only large organisations benefit, SMEs need practical support in adopting new technologies. The government and industry need to collaborate more to provide innovation vouchers that help smaller firms test AI applications.

Shared infrastructure could give businesses access to expertise, data and computing resources. Advisory services, meanwhile, would guide entrepreneurs and managers through the process of identifying relevant solutions and implementing them effectively.

Such initiatives would ensure that innovation benefits the wider economy and not just its largest players, making Malta’s growth more resilient and inclusive.

Alongside economic opportunity, AI raises important ethical questions. Citizens expect their data to be protected, decisions to be transparent and technology to be used responsibly. By prioritising human-centric regulation and aligning with European standards, Malta can establish itself as a jurisdiction that not only encourages innovation but also safeguards trust. This would strengthen our international reputation and attract businesses seeking to develop AI responsibly.

Artificial intelligence is not a distant prospect – it is already among us. The question is how Malta can harness it in ways that enhance competitiveness, protect workers and deliver long-term benefits.

Investing in skills and education will ensure the workforce is ready for the changes ahead. Supporting SMEs with practical tools and incentives will enable businesses of all sizes to take advantage of innovation. Embedding ethical and responsible principles into AI governance will build trust and attract investment.

The Nationalist Party will embrace AI to create better quality jobs, open stronger career opportunities and increase our country’s productivity.

If pursued with foresight, these steps can help Malta transform AI from a challenge into an opportunity.  An opportunity that strengthens our economy and secures prosperity for future generations.

Jerome Caruana Cilia is the shadow minister for the economy and enterprise.